• Acquisition of loss-making stakes worries ONGC officials

    The series of acquisitions of loss-making stakes from the private players in the Krishna-Godavari Basin by the Oil and Natural Gas Corporation (ONGC) have remained a major cause for concern among the officials who have been associated with the public sector major for several decades and played a key role in its successful expansion. They are terming the deals as “forcible purchases” by the ONGC and seeing it as the result of intended involvement of politicians to benefit the private players.

    Cairn India and the Gujarat State Petroleum Corporation (GSPC) have already offloaded their assets to the ONGC, while the buzz is that another corporate giant is to follow suit. According to highly placed sources, the corporate major is all set to transfer its assets in the KG Basin to the ONGC. Deliberations are in progress at the high-level with regard to the price fixation and the very recent GSPC acquisition deal has given a boost to those negotiations.

    The ONGC, which has already been developing the Ravva oil and gas field in the KG Basin in association with Cairn India, is now acquiring a major share in the GSPC’s Deen Dayal West field block located near Mallavaram, about 35 km from here. Despite severe criticism from different quarters, the Central government has prompted the firm to acquire 80 per cent participating interest of the GSPC along with operatorship rights, at a purchase consideration of $995.26 million.

    The code of conduct is deterring the officials from expressing their views in public and their efforts to discourage the ONGC Board from clinching such deals are in vain. “Decisions on acquisitions should be taken by the board of directors basing on expert opinion, but not by the political leaders. The forcible acquisitions of loss-making assets will have an adverse impact on the overall performance of the ONGC very soon,” a senior official associated with the ONGC has told The Hindu.

    “Assets belonged to the private and corporate majors in the KG Basin are nothing but the off-shoots of the ONGC, as we are the foremost explorers of oil and natural gas here. After thoroughly enjoying profits from the assets, the firms are offloading them to the ONGC for a maximum price following drop in the revenues,” another senior official has pointed out.

    “The deal in progress is much bigger than that of the Cairn India and the GSPC and it may be pushing the ONGC into heavy losses soon,” lamented another official, who has been transferred from the KG Basin. Though there is an instance of the ONGC turning the fortunes for the loss-making Mangalore Refineries and Petrochemicals Limited following its acquisition, the officials term it as “rarest of the rare” case. Pittsburgh Steelers Authentic Jersey

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