Political pressure on ONGC to retain rig in Rajasthan

Vol 7, PW 11 (13 Aug 03) People & Policy

One of the problems with being a government-owned company is political pressure from MPs.

With national elections less than a year away, MPs are keener than ever to win favour with voters by getting ONGC to take up or continue exploration and production activities in their constituencies, even if there's only the faintest hint of oil. All it takes is for a MP to send a letter to Shastri Bhawan to see ministry bureaucrats press alarm bells and spring into action, however outrageous the demands.

Additional care is taken if the MP belongs to an opposition party. Take MP Sona Ram Choudhury from the opposition Congress Party in Rajasthan.

Choudhury wrote to oil minister Ram Naik in June protesting against ONGC's plans to move one of its onland rigs from Rajasthan to Gujarat. Among other things, Choudhury wants rig E-760-13 to remain in Rajasthan even though it is now sitting idle in the Thar Desert and is likely to remain so for more than a year awaiting environmental clearance before being allowed to resume drilling.

It makes no commercial sense for ONGC to retain the rig in Rajasthan as it first needs to carry out geo-scientific work and shoot new seismic over the Chinnewala Tibba gasfield discovered a few months ago while drilling with this rig on South Kharatar block. More, ONGC wants to convert rig E-760-13 from a desert rig to a conventional rig as this is the only way it can avoid the presence of several canals, overhead power transmission lines and narrow roads en route to Mehsana in Gujarat.

For most oil companies, such operational decisions are determined by commercial considerations, not political ones. But sadly, not for ONGC: India's richest state-run utility is a regular target of unscrupulous politicians.

In this particular instance, ONGC, Oil India and the ministry wasted many hours of valuable time that could have been utilised elsewhere preparing a 'proper' reply to the MP. Thankfully, ONGC stood firm and was backed by the oil ministry.

"Movement of rigs is governed by operational requirements," we are told. "Stalling the shifting of the rig is not a justifiable proposition, since this would lead to idling of the rig which has very high negative financial implications and is a loss not only to the company but also to the nation."