Will ONGC’s new chairman be from the private sector, or a bureaucrat?

The decision by the Public Enterprises Selection Board (PESB) to reject all the 10 candidates in the race for the post of the chairman and managing director of Oil and Natural Gas Corporation Ltd (ONGC) may open the door for the coveted job for private-sector executives and the bureaucracy.

PESB has decided to constitute a search panel for the appointment of ONGC chairman, which means the company may run without a full-time CMD for at least six more months. After Shashi Shanker retired in March this year, its director (finance) Subhash Kumar was given the additional charge of CMD. Kumar will superannuate by the end of December 2021.

The prospects of a private-sector executive getting the top job has sparked a debate on the merits of bring an “outsider” to head ONGC, which has seen output from its ageing fields decline constantly. This has hit India’s oil output as the company accounts for 70 percent of domestic production.

"If a private sector player comes into action, that may bring a lot of change to the way ONGC functions. Furthermore, the new CMD will be under pressure to perform, which may increase ONGC's production, which is on a downward trend,” according to an official from a private sector oil and gas company.

A former ONGC official had a different view: "ONGC requires someone from inside, as an outside player may not understand the work culture. I believe the acting chairman, Kumar, is running the show efficiently. Among those who were in the race, Pomila Jaspal was the number one in terms of seniority. The government may have the option to look for a bureaucrat also," he said.

Industry veterans say the ONGC officers’ union may oppose the appointment of someone from the private sector.

Another industry player said that the government may consider splitting the CMD’s position and pick a bureaucrat as chairman and someone from the private sector as managing director.

The 10 candidates who were rejected for the post of chairman and managing director include two were Indian Administrative Service Officers Avinash Joshi and Niraj Verma, from the 1994 batch belonging to the Assam-Meghalaya cadre. The other known names for the post include Mangalore Refinery and Petrochemicals Ltd (MRPL) director-finance Pomila Jaspal, ONGC director (technology and field services) Om Prakash Singh and Container Corporation of India director-finance Manoj Kumar Dubey. The remaining candidates include Security Printing and Minting Corp of India Ltd director-finance Ajay Agarwal, ONGC additional director general Anand Gupta and ONGC executive directors Sandeep Gupta, Pankaj Kumar and Omkar Nath Gyani. Later, PESB picked Pankaj Kumar for the post of Director (Offshore) from the list of seven candidates.

This is not the first time that applicants for the position of ONGC chairman have been turned down. In 2006, though PESB had recommended R S Sharma, the then director of finance of the company, as its chairman, the Prime Minister's Office had rejected the appointment.

Interestingly, Najeeb Jung, who resigned from the Indian Administrative Service in 1999, was considered to be leading the race for the job of ONGC chairman once the search committee was appointed. He was at the Oxford Institute of Energy studies at that time. However, ONGC veteran Sharma was appointed as the chairman after PESB recommended his name once again. Jung later went on to become the 20th Lieutenant Governor of Delhi from July 2013 to December 2016.
The appointment of ONGC chairman was delayed as PESB had no chairman till April this year. In PESB too, for the first time, a private sector specialist was appointed as its head when Mallika Srinivasan, Chairman and Managing Director of Tractors and Farm Equipment (TAFE) was appointed as chairman in April.