Oil and Natural Gas Corporation (ONGC) has a new chief executive to spearhead its new energy, petrochemical and corporate strategy as part of a board shake-up aimed at breathing new life into the state-controlled giant.
Arunangshu Sarkar has been appointed as Chief Strategy and Corporate Affairs Officer, ONGC said in a stock exchange filing.
Prior to his appointment, Sarkar, a petroleum engineer from the Indian School of Mines, Dhanbad, was group general manager (production) at ONGC. He had previously worked as general manager (corporate strategy and planning) at ONGC Videsh Ltd, the overseas investment arm of ONGC.
Two years ago, the ONGC board was reorganised. In addition to the creation of the new post of Director (Strategy and Corporate Affairs), the post of Director (Production) was created following the merger of the Director (Onshore), who is in charge of all onshore oil and gas fields, and the Director (Offshore), who looks after all offshore assets, such as the major Mumbai High fields.
In addition to the position of Director, Production and Director, Strategy & Corporate Affairs, other key management positions at ONGC include the exploration, finance, human resources, and technical and field services divisions, with all segments reporting to the Managing Director of ONGC, Arun Kumar Singh.
According to an office order dated July 2023, the new Director (Strategy and Corporate Affairs) will be in charge of joint ventures, downstream petrochemicals, new energy (renewables, hydrogen and carbon capture), corporate strategy, corporate marketing and legal.
“The existing corporate strategy and planning (CS&P) group will be split into two verticals, namely corporate planning and corporate strategy. Corporate planning will continue to report to the president, while the corporate strategy group will report to the director (strategy and corporate affairs),” it said.
The corporate affairs group under CS&P has been renamed the ministry-parliament coordination group and will report to the head of corporate planning, he added.
The renovation follows the line of the Organizational Transformation Project (OTP) suggested by the consulting firm McKinsey.
Most of the current senior positions were created in 2001 under a McKinsey OTP plan. The McKinsey OTP was initiated in 2000 by ONGC’s then Chairman and CEO Bikash Bora and implemented despite resistance within the firm by his (late) successor Subir Raha, who rebranded the OTP as the Corporate Rejuvenation Campaign (CRC).
In 2001, in accordance with McKinsey’s recommendations, ONGC’s Chief Personnel Officer was renamed Chief Human Resources Officer, the Chief Operations Officer became Chief Offshore Officer, the Chief Technical Officer became Chief Onshore Officer, while the Chief Drilling Officer became Chief Petroleum Technology and Services Officer.
Exploration and Finance stocks remained unchanged.
The second phase of McKinsey’s recommendations is now being implemented, the sources said, adding that the company’s management has been discussing board-level renewal with the top administrative ministry of Petroleum and Natural Gas since mid-2021.
The position of Director (Research and Development) was also suggested, but this has not yet been implemented.
In March 1997, ONGC initiated a corporate restructuring project in consultation with international management consultant McKinsey and Company Inc.
The consultants presented their recommendations on ONGC’s Organizational Transformation Project (OTP) to its management in phases during the years 1997 to 1999.
The recommendations highlighted the need for greater focus on ONGC’s core activities: finding and producing oil and gas, better management of oilfield services skills and expertise, greater commercial and performance accountability, and faster decision-making through decentralization.
McKinsey had called for a focus on structural changes as well as changes in systems and procedures in the areas of exploration, field management, drilling, materials management, logistics, human resources, budgeting and costing, performance management systems, research and development institutes, and information services.
In the first part of its report, McKinsey suggested that ONGC should focus on accumulating reserves and increasing production, promote organizational and individual responsibility, and operate with commercial objectives in mind first and foremost.
Four important areas had been identified: reserve accumulation, commercial responsibility, multidisciplinary approaches and overseas opportunities essential for ONGC to maintain its dominant position in the Indian oil sector.
From a functional perspective, McKinsey suggested that different departments operate cross-functionally, pooling talent and expertise from other departments.
Prior to 2001, ONGC had four departments: drilling, operations/production, technical and personnel, and accounts, which often led to fragmentation of efforts.
First published: September 15, 2024 | 1:11 PM IS
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