ONGC goes for a facelift

Oil and Natural Gas Corporation (ONGC), India's largest integrated oil company, has embarked on image revamp.

It is also considering entering new businesses and is changing its human resources policy to reduce the average age of its top echelon.

The Rs 34,534 crore company has roped in Grey World Wide and Concept for designing corporate campaigns ahead of its public offering.

Subir Raha, chairman and managing director, ONGC, told Business Standard, "There is a need for osmosis. Considering the new business and assimilation of new technology, new paradigm shift, there is a need for young talent which is more open to change."

Speaking on the sidelines of Oceantex 2004, a three-day international conference organised by the Chemtech Foundation, Raha said the corporation is ready for posting eligible executives as group general manager and executive directors as "almost a dozen talented people are retiring".

He pointed out that "the age of the senior management cadre will further come down".

ONGC is also busy on a major brand building and corporate campaign and has lined up advertisments worth Rs 25 crore in the run-up to its public offering.

Besides, it has also roped in National Institute of Design to work on a logo for its proposed foray into retailing and distribution of transportation fuel.

ONGC expects to enter the retailing business, with an outlet in Mangalore by the end of 2004. All this at a time when ONGC's net worth has catapulted to Rs 42,250 crore as on December 31, 2003, from Rs 35,604 crore as on March 31, 2003.

"Our net worth has gone up by $1.447 billion (to roughly $9.4 billion) within nine months, a corporate record in itself," Raha said.

He attributed this to the acquisition of MRPL, overseas buyouts by its wholly owned arm ONGC Videsh and aggressive capital investment.

"We have been stepping up capital investment in the last two years, commissioning new facilities, purchasing of new equipment and materials and emphasising on modernisation. We are replacing obsolete pipelines and equipment besides upgrading and acquiring new equipment," he added.

On the corporation's plans for picking up equity in Bharat Petroleum Corporation's proposed six million tonne refinery at Bina in Madhya Pradesh, Raha said that the two oil companies "have agreed in-principle that ONGC will pick up 26 per cent equity in the refinery and marketing terminal".

Divestment roadshows: The first roadshows for the sale of 10 per cent government equity in ONGC will begin on February 23, 2004, in Mumbai.

Raha said the price band will be fixed one day prior to the date of issue opening. The book-built issue is to open on March 3.

MSCI weightage: ONGC expects its stock weightage in the Morgan Stanley Capital Index to rise from 7.5 per cent to about 12 per cent after Indian Oil and GAIL offload their stake in the company. The weightage may rise further to 15 per cent after the company public issue.