ONGC: GRUDGING ACCEPTANCE OF REFORM

Vol 2, PW 24 (23 Dec 98) Exploration & Production
     

Senior management at ONGCs Western Regional Business Centre (WRBC), headquartered at Baroda in Gujarat, have grudgingly come to accept the need for reform.

This is surprising in the light of past revelations by this report of entrenched resistance from ONGC staff to proposals from the US management consultants McKinsey to radically overhaul working practices within ONGC through a series of Organisational Transformation Projects, or OTPs. Now, however, Petrowatch learns from ONGC sources working with McKinsey of a growing realisation among a section of staff that reform is inevitable, indeed welcome.

This report learns that Nathu Lal, Executive Director of ONGCs WRBC has begun formulating a blueprint for reform, based on detailed proposals presented by McKinsey last month. The blueprint will draw on the perceived success of McKinseys first pilot project at the Neelam oilfield on the Bombay Offshore.

McKinsey is reassuring ONGC staff that reform does not mean massive job cuts. A McKinsey note obtained by this report writes: "Analysis of the study group establishes that the proposed pilot (at WRBC) is feasible with minimum disruption of people".

This statement is key. In the past, senior ONGC directors have privately expressed fears that the McKinsey inspired reform process would strip them of their power by abolishing ONGCs regional business centre: MRBC, SRBC, WRBC, etc.

McKinsey now appears to have convinced all sections of ONGC that its only objective is to reorganise the corporation on the basis of assets and functions.