By PRABEER SIKDAR
DEHRADUN, 24 Apr 2009:
Knowing well that world Oil and Gas reserves won’t last forever, ONGC has been looking beyond Hydrocarbons, said RS Sharma, Chairman & Managing Director of ONGC, today. He added that ONGC had become an Energy Company and was not restricted to just Oil and Gas. Its corporate philosophy was now ‘Oil and Beyond’.
He said this during a media interaction at Tel Bhavan, today, in the presence of Dr AK Balyan, Director (HR), AK Hazarika, Director (Onshore), DK Pande, Director (Exploration), Sudhir Vasudeva, Director (Offshore) and UN Bose, Director (Technical and Field Services).
Elaborating further, Sharma told media persons that ONGC was foraying out into new energy areas like solar, wind and other alternate sources of energy.
“We have already commissioned a 50 MW Wind Power Plant on 6 September, 2008 in Gujarat,” he said adding that ONGC had also inked an MoU with Uranium Corporation of India (UCI) for extraction of uranium from its sub-surface drilling.
“Despite good potential, right now, India depends on foreign countries for its uranium requirements,” he said, disclosing that ONGC had set up four teams to explore uranium deposits in Gujarat, Rajasthan and Assam. Feasibility studies were on in this regard.
During his extensive interaction with the media, he also spoke on various issues concerning ONGC in particular and others related in general to the global oil industry.
R&D – Not reinventing wheel
While answering a question on ONGC’s R&D and Engineering capabilities vis-à-vis other international Oil majors, UN Bose, Director (Technical and Field Services) acknowledged that there existed a large gap.
“There is no point reinventing the wheel, as we believe in capturing already available technology,” he explained.
Future of Oil
Dispelling the myth of oil resources getting exhausted anytime in the near future, Sharma said, “The world is not going to run out of oil in the foreseeable future.”
Commenting on the concept of ‘peak oil theory’, he said that the advances in technology had made it possible for Oil companies to go for deep/ ultra-deep exploration, which was not possible earlier. “Through use of latest technology, the untapped oil resources, which could be equivalent to the existing oil resources, can be extracted,” he said, emphasising that in the foreseeable future ‘we may not run out of oil resources.
Meltdown Effect
Answering a question on the effect of the global meltdown, he pointed out that it had negligible impact on ONGC. “We have been able to withstand better than our global peers,” he said, adding that ONGC Videsh operates in 18 countries.
Continuing he said, “The reasons primarily are that the cost of equipment used in oil exploration/ drilling has come down. Similarly, unlike foreign oil companies, who hiked oil prices, ONGC had perforce to operate on a business model based the administered price regime.
”Referring to administered price mechanism practiced by Indian oil majors, he said that following the global meltdown, while it battered others due to fall in demand/ price of oil, ONG C remained immune. Earlier, ONGC had an ‘oil price realisation’ of around $ 52 a barrel, which was now just below $ 50 a barrel. At the same time, the price of equipment had come down considerably and poaching of its human resources had also decreased. ‘So, while ONGC did not benefit too much from the ‘upside’, it was not hurting from the ‘downside’. As such, ONGC was in a ‘comfort zone’.
Oil Prices
While answering another query on oil prices, he claimed that these wouldn’t come down further. Referring to the time when oil prices went on to command 146$ a barrel (July, 2008), he also questioned the veracity of oil price predictions done by the likes of Goldman Sachs.
The international securities firm had then predicted the oil price would touch $ 200 a barrel, ‘which turned out to be untrue’. “The long term demand and supply paradigm will ensure that prices do not fall much further,” he asserted.
ONGC strikers’ fate
Commenting on the recent Oil PSUs nationwide strike, which also included ONGCians, Sharma told media persons that the issues raised by them, ‘did not justify the strike’. “In those three days, not only was the economy hit, but also the common man was put to great hardship,” he said, adding that all the 64 ONGCians whose services had been terminated for joining the strike had been taken back.
“However, an inquiry is still on against those office-bearers who had passed the strike resolution, and they remain suspended. And if found guilty, the punishment would be exemplary.”
ONGC & Brain drain
Commenting on the effect of brain drain faced by ONGC, Sharma said that following global recession, very few employees were jumping ship. “Compared to last year, the situation on this front is quite better.”
Contract employees
Responding to another question on the frequent dharnas staged by ONGC’s contractual employees at regular intervals, Sharma clarified that ‘it was due mainly due to miscommunication between workers and management’.
Earlier, Sharma presented a slideshow about ONGC’s journey since its inception.
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