The Maharatna company does not even have a protocol to decommission old pipelines, one of which has leaked crude oil and polluted about 10 acre of fertile agricultural land in Nagapattinam.
According to an environment ministry official, who is handling the grassroots situation in Nagapattinam and supervising the environment situations there, the Maharatna company does not even have a monitoring system in place to keep a check on functioning of its underground pipelines, there are about 30.
This is a commentary on how the ONGC functions, even as it has recently joined hands with Japan’s largest oil and gas company, Inpex Corporation, for development of Krishna Godavari basin deep-sea block, which it owns. Inpex has acquired 26 per cent stake in ONGC’s block.
Although ONGC will continue as the operator of the block with a 34 per cent stake, a great deal of efficiency seems to depend on its partners in the block (GAIL, Gujarat State Petroleum Corporation, HPCL and OilIndia who have with 10 per cent stake each).
According to Petroleum Ministry statistics, crude import in India is over 75% of its requirement. Domestic production has recently gone up to slightly over 1%, at a little over 7,70,000 barrels per day, which is Indian contribution to the global output, even as the gap between demand and domestic supplies is enormous. Of India’s total trade deficit (pegged at $175 billion), 85% is due to short production of crude domestically.
Things have come into such a pass that even President of India Pranab Mukherjee has recently reminded the nation about the domestic constraints running for decades.
For an answer we have to go deep into ONGC’s staff-training culture, which is fundamentally complacent. ONGC does not have an inhouse system of year-on-year audit of its own staff’s performance. Huge population is often unmanageable, a good number of whom do not have enough to do everyday. Selection of agents working partners, employments, outreach to communities are all decided by political will and forces, where engineering quality does not exist.
All the big oil companies, for example Statoil, Mobil-Exxon, etc, are guided by the world class quality norms guided by ASQ Body of Knowledge and ASQ six-sigma training to produce more, maximizing customer value and minimizing wastages through Quality inputs (Knowledge plus Efficiency plus Costs), and inbuilt safety audits.
According to ASQ, which administers the Malcolm Baldrige Performance Excellence programme in the USA based on principles of Deming’s vision of Quality in over 150 countries of the world and adopted by the likes of GE, Exxon, Baxter, Boeing etc. in the USA and the likes of the Tata’s Infosys in India, the Quality is just not a windbag.
It means the will to continuously improve, develop inbuilt damage control and monitoring mechanism, and be intrinsically competitive without taking support from external factors. Most of these companies exist and work at world’s top crude producing countries, Venezuela, Saudi Arabia, Lybia, Turkmenistan, Bahrain, Kuwait etc.
There have been feelers that perhaps since a few decades last ONGC or OVL or Reliance Industries Limited (RIL) could have built up a presence in these nations.
When everybody speaks about insufficiency of oil production, a fact is sidelined. About 25% of domestic demand is met by domestic production from ONGC, Reliance and the combine of HPCL, IOC and OilIndia.
The latter three being primarily the refinery and distribution arms of the government with a small quantum for production upstream, the major responsibility of domestic supplies is shouldered by the ONGC profitability of which is driven by upswing of crude and dollar values, and not by performance.
There are problems, especially when the ONGC Videsh Ltd (OVL) is embroiled in a number of bottlenecks in upstream exploration in foreign waters. The list is quite big now:
- OVL is mired in a dispute over a block in the South China Sea where China claims territorial rights over blocks.
- Political upheavals in Egypt, Libya, Sudan and Syria
- Bad blood between Iran and the United States, stopping and asversely influencing OVL’s exploration efforts and jvs with Iranian firms
- Helplessness at relations both with Iran (historical) and USA, the current friends who have some good offers in US and Canada for profitable exploration.
Probably as a temporary relief, the offer from Russia to tie-up with OVL having bought US Hess Corp’s stakes in Azeri, Chirag and Guneshli in Azerbaijan has some hope of quick production of crude for refineries.
The sleek ray of hope from Russian Rosneft, which offers to work with OVL in tandem, is a long-term venture. Observers believe that OVL’s investments in Russian Sakhalin-I and in fields in Mozambique, Brazil, East Timor and Australia should also boost morale of the consumers, but no immediate relief. (IPA Service)