Govt may back down on ONGC

The petroleum ministry today indicated that it might take back the nomination of VK Sibal, director-general of hydrocarbons, to the board of Oil and Natural Gas Corporation in an attempt to make peace with ONGC Chairman Subir Raha.

Sibal, on his part, opened a new front against Raha when he said that ONGC was leaking information on new oil and gas discoveries to the media instead of first reporting these to his office with an eye on the company's stock price.

"If they consider me a regulator, then they should inform me," he said, adding that ONGC's action could invite a complaint to the Securities and Exchange Board of India.

He also indicated that he would not step down from the ONGC board under pressure. Maintaining that he was appointed by a presidential order, he said, "How can they disobey the President? I am a government servant. I will do what it says."

But petroleum ministry officials said the government did not want things to come to such a pass that the ONGC chairman had to resign. "The government does not want a showdown at the September 21 annual general meeting of ONGC," said an official.

Raha had earlier written to Petroleum Minister Mani Shankar Aiyar that he would resign if the existing government nominees on the ONGC board pushed a resolution effecting the nomination of the two new directors at the AGM. With the government having a controlling stake of 74 per cent, such a resolution can be passed.

"If someone wants to resign, he should resign. What is this threatening all the time," Sibal told a news channel when asked about Raha's threat to resign.

Ministry officials maintained that Petroleum Secretary SC Tripathi had written twice to Raha, inviting him to a meeting to settle the issue, but he had proceeded to write to Aiyar on August 25.

ONGC executives, on their part, maintained that the norms laid down by Sebi did not permit more than two government directors on the company's board.

Asked about Raha's contention that Sibal's appointment would amount to the sectoral regulator being on the company's board, Sibal told Business Standard, "I am a technical adviser and not a regulator. If statutory powers of a regulator are given to me, then I will not be on the board."

Officials also pointed out that Raha had refused to sign a memorandum of understanding with the government for 2005-06, a practice followed by all public sector undertakings for committing to targets set for them by a task force of the department of public enterprises.

To this, ONGC executives said the company wanted the government to give a commitment at the time of signing of MoUs since delays in government decisions caused loss of business to PSUs, especially in sensitive areas like bidding for oil and gas blocks abroad.