Arun Singh yet to grasp E&P fundamentals

Vol 26, PW 15 (13 Jul 23) People & Policy
 

Arun Singh left drillers scratching their heads in confusion after a quarterly review meeting on June 22 (2023).

Some claim the ONGC chairman is yet to grasp the E&P business fully. Singh made an online speech to Mumbai-based staff from ONGC's drilling, well services and other departments at around 11am that day.

His calls to reverse ONGC's declining production made perfect sense. But some of his remarks during the one-hour pep talk left many in attendance perplexed.

For instance, Singh said ONGC should have standardised offshore platform jackets ready to install at short notice. "He (Singh) clearly hasn't yet understood the upstream business and is still thinking from a downstream and refining background (as former BPCL chairman) perspective," says a source.

"Standardised jackets are impossible; each jacket is custom-designed and built for a specific offshore location, depending on the seabed soil conditions and other variables; I was surprised to hear him advocating standardised jackets." Our source acknowledges some standardisation and predictability in the refining sector, explaining Singh's apparent lack of understanding.

However, the E&P sector, by its nature, is not as predictable and cannot adopt one-size-fits-all solutions. Drillers also took exception to Singh's remarks that ONGC should not acquire more rigs but focus on efficiency.

For one, Singh recounted an anecdote about dining at the Bukhara Restaurant at Delhi's luxury ITC Maurya hotel. He reportedly said the restaurant had limited options on its menu, so when a customer orders any dish, it is served within 15 or 20 minutes.

But if the restaurant had more dishes, his order would have taken up to 45 minutes. With limited options, efficiency improves, Singh stressed.

He also extolled the virtues of efficiency over accuracy. "If one goes after accuracy, efficiency cannot be achieved," Singh said.

Not everyone was convinced. Some stress that ONGC's company-owned rig performance is poor because of staff shortages.

"There's typically a 15% to 20% staff shortage on each rig because of limited recruitment over the past four years," we hear. "And staff keep retiring."