Chatterjee tells ONGC to stop wasting money

Vol 4, PW 8 (24 May 00) Exploration & Production

ONGC finance director IN Chatterjee has launched a withering attack against waste and mismanagement within the corporation.

Writing in the February edition of ONGC's quarterly in-house bulletin 'Corporate Review', Chatterjee calls on ONGC managers to be more diligent when compiling cost estimates for exploration and production projects. "The time has passed when we can function at any cost," writes Chatterjee, "I request all concerned to be very meticulous whenever any expenditure is proposed." Hinting at past laziness in cost evaluation, Chatterjee adds: "Normally, we are not serious about post-implementation performance evaluation.

We must ensure that once a project is implemented it gives the return anticipated in the proposal stage. This is an area where we have to focus on now." Chatterjee warns of the danger from multinationals in a deregulated oil and gas sector.

"More and more international companies are likely to set up operations in India," he said, "ONGC will come under increasing pressure of competition in coming years." Chatterjee highlights the slump in ONGC's share price against an otherwise booming stock market. "There is no economic value addition in ONGC", he adds, "When we look back to our own performance, we do not see much comfort.

The price of ONGCs stock has declined even though ONGC has shown higher profit during the first three quarters of the current financial year." The finance director ends on a pessimistic note: "Crude oil production has been showing a declining trend as we are unable to supplement old assets with new producing assets and there appears to be not much scope to reverse the trend in the short term."