ONGC gets director to spearhead new energy, petrochemicals business

Oil and Natural Gas Corporation (ONGC) has got a new director to spearhead its new energy, petrochemicals and corporate strategy as part of a board revamp aimed at breathing fresh life into the state-controlled behemoth. Arunangshu Sarkar has been appointed as Director for strategy and corporate affairs, ONGC said in a stock exchange filing.

Before the elevation, Sarkar, a petroleum engineer from the Indian School of Mines, Dhanbad, was Group General Manager (Production) at ONGC. He had previously worked as General Manager (Strategy & Corporate Planning), ONGC Videsh Ltd - the overseas investment arm of ONGC.

Two years back, the board of ONGC was reorganised. Besides creating the new post of Director (Strategy & Corporate Affairs), the post of Director (Production) was created after merging Director (Onshore), who is in charge of all oil and gas fields located on land, and Director (Offshore) who looks after all offshore assets, such as the prime Mumbai High fields.

In addition to the post of Director Production and Director Strategy and Corporate Affairs, the other key directorial positions at ONGC include the exploration, finance, human resources and technical & field services divisions, with all segments reporting to ONGC Managing Director Arun Kumar Singh.

According to an office order of July 2023, the new Director (Strategy & Corporate Affairs) will be in charge of joint ventures, downstream petrochemicals, new energy (renewable, hydrogen and carbon capture), corporate strategy, corporate marketing and legal.

"Present corporate strategy and planning (CS&P) group (will) be split into two verticals viz corporate planning and corporate strategy. Corporate planning would continue to report to the chairman, whereas the corporate strategy group would report to the director (strategy and corporate affairs)," it said.

The corporate affairs group under CS&P has been renamed as the ministry and parliament coordination group and will report to chief corporate planning, it added.

The revamp is on the lines of the Organisation Transformation Project (OTP) suggested by consulting firm McKinsey.

Most of the present board-level positions were created in 2001, under a McKinsey OTP plan. McKinsey's OTP was initiated in 2000 by then ONGC chairman and managing director Bikash Bora and implemented despite resistance from within the company by his successor (late) Subir Raha, who renamed OTP as the Corporate Rejuvenation Campaign (CRC).

In 2001, in line with McKinsey's recommendations, ONGC's Director - Personnel was renamed Director HR, the Director - Operations became Director - Offshore, Director - Technical became Director - Onshore, while Director - Drilling became Director - Technology and Oilfield Services.

The Exploration and Finance titles were unchanged.

The second phase of McKinsey's recommendations is being implemented now, sources said, adding that the company management has been discussing the board-level revamp with the parent administrative Ministry of Petroleum and Natural Gas since mid-2021.

The position of Director (Research and Development) was also suggested, but this has not been implemented yet.

ONGC, in March 1997, initiated a project for restructuring of the company in consultation with international management consultant McKinsey and Company Inc.

The consultants submitted their recommendations on the Organisation Transformation Project (OTP) of ONGC to its management in phases during the years 1997 to 1999.

The recommendations highlighted the need to have a greater focus on ONGC's core activities of finding and producing oil and gas, better management of skills and expertise in oil field services, greater commercial and performance accountability and quicker decision-making by decentralisation.

McKinsey had called for the need for focussed attention on structural changes and also changes in systems and procedures in the areas of exploration, reservoir management, drilling, material management, logistics, human resources, budgeting and costing, performance management systems, research and development institutes and information services.

In the first part of its report, McKinsey suggested that ONGC should focus on reserve accretion and increasing output, promote organisational and individual accountability and function with commercial goals uppermost in mind.

It had identified four thrust areas -- reserve accretion, commercial accountability, multi-disciplinary approaches and overseas opportunities essential for ONGC to maintain its dominant position in the Indian oil sector.

From a functional view, McKinsey suggested that different departments operate in a cross-functional manner, pooling talent and expertise from other departments.

ONGC in pre-2001 had four departments -- drilling, operation/production, technical, and personal and accounts, which often led to fragmentation of efforts.