First step to reform - ONGC hives off seismic

Vol 24, PW 17 (15 Jul 21) People & Policy
       

ONGC is slowly coming to terms with its inevitable fate as it takes the first tentative steps towards hiving itself off into separate businesses.

This report learns ONGC hopes to have its onshore geophysical services division operating as an independent 'vertical' or business by March 31 (2022). Within a few years, the new 'vertical' could begin working as an independent seismic contractor.

ONGC's executive committee, including acting chairman Subhash Kumar and other directors, took the decision on July 8 (2021). Since then, middle-level managers have discussed the proposal threadbare in online meetings with seismic team heads in Dehradun, Vadodara, Kolkata, and Chennai.

A key participant at the EC meeting was executive director SK Sharma, ONGC's Mumbai-based chief of geophysical services who heads both offshore and onshore seismic. A senior company source tells us Sharma and the onshore geophysical services team will move to Vadodara to set up the new business.

Offshore geophysical services will remain in Mumbai and become independent, no longer reporting to Sharma. ONGC bosses will closely 'hand-hold' or monitor the new Vadodara onshore geophysical services 'vertical' for three years.

At first, the team will act as a seismic contractor mainly for ONGC, but eventually, it could begin bidding for jobs from companies anywhere in the world. ONGC's move follows a series of DGH recommendations prepared by director-general SCL Das, sent to ONGC management by the oil ministry's additional secretary exploration Amar Nath on April 1 (2021).

"Given its experience in every sphere of E&P, work centres and infrastructure and a vast army of employees," states Clause 6(iv) of the Das recommendations, "ONGC may explore creating separate entities for drilling, well services, logging, workover services and data processing through various modes, such as start-ups, investment trusts, firms and companies." Most ONGC managers contacted by this report are optimistic and think the new onshore seismic 'vertical' will work well.

"New technologies will come in, and efficiency will improve," says one. "And this will let us focus on production."