by R. Sasankan

A journalist always craves for feedback – and there is no greater satisfaction than when he sufficiently piques interest to draw comment from people with terrific domain knowledge arising from the positions of importance that they had occupied in the past.

I have written several pieces in recent weeks about the controversial gas migration issue that has enveloped Reliance Industries Ltd (RIL), ONGC and the Directorate General of Hydrocarbons (DGH).

Several eminent personalities including former CMDs and directors of ONGC – most of whom I have known professionally and have been regular readers of my column – have written in with their views on the subject. Many of them felt I had given greater importance to D.K. Sarraf, ONGC’s present CMD, than Narendra Kumar Verma, present MD of ONGC Videsh. In 2013, as ONGC’S director (exploration), Verma initiated the move to expose what later snowballed into the gas migration scam. I do not intend to shy away from the criticism, no matter how well-meaning and mild the reproof might be.

I have personally known and interacted with almost all the CMDs of ONGC since P.T. Venugopal in 1981 except D.K. Sarraf with whom I had only a brief encounter when he was director (finance).

The post of CMD of ONGC is almost on a par with that of secretary in the Ministry of Petroleum and Natural Gas but I have seen ONGC CMDs even visiting Joint Secretaries in the ministry just to keep them in good humour. The only one who refused to do so was Col S.P. Wahi who would call on only the secretary and no one below that rank. He had even battled with secretaries and once out-smarted a powerful bureaucrat like G.V. Ramakrishna while seeking an extension of his tenure. Wahi always cultivated the political bosses who provided him protection against the needling by the bureaucracy.

Sarraf has never been a heavy weight. He gave the impression of being a meek person and not very articulate even after becoming the CMD. But he surprised the corporate world shortly after taking over as ONGC CMD by moving the Delhi High Court against Mukesh Ambani-controlled RIL. He also had the courage to make the Ministry of Petroleum and Natural Gas a party to the case. Since the 1970s, RIL has been perceived as the most politically powerful company in the country and many of those who occupied the top position at ONGC had sought its blessings.

I would be first to acknowledge that credit should not go to Sarraf alone. Did my columns solely focus on Sarraf’s contribution? Certainly not. In my column Gas Migration: Collusion or Laxity, I carried the pictures of quite a few people including that of Narendra Verma. The caption below Verma’s picture said: Deserves a Padmasree. In comparison, the caption below Sarraf’s read: Weakness for predecessors.

The picture caption simply acknowledged the immense contribution made by Verma to ONGC and the nation by recommending him for a Padmasree. He may not get it because in India awards do not really go to the deserving. As a geologist, Verma created history: he was extremely bold in seeking production data from DGH to confirm his assessment about interconnectivity of the reservoirs. He did not act on a fresh G&G data. His illustrious predecessors had it before them.

Those who are familiar with the Indian PSUs will agree with me that without the help of the CMD, Verma, who was director (exploration) then, would not have been able to take the matter to its logical conclusion. Sarraf had the option of dealing with the situation by writing a letter to the Joint secretary (exploration) in the ministry drawing his attention to the discovery of interconnectivity of the reservoir. In the normal course, the JS would have, in turn, written to the secretary who would then have marked it to the DGH – and then the file would have been consigned to the dusty shelves.

I am told that Sarraf was initially reluctant to proceed in the matter and that Verma prevailed on him to do so. This could be true. Any CMD would think several times before making up his mind to take on a company like RIL though the basic intention was to protect ONGC’s interest.

I see Sarraf’s action in a different light. Let us not forget that he was only two or three months into his post as CMD when he decided to pull the trigger on RIL. In the way the system works, the first year is the mandatory probation period for any public sector CMD. This is the period when the CMD is the most vulnerable. (Remember, this was the period chosen by the former petroleum secretary in an attempt to force Sarraf, head of a selection committee, to recommend his friend in BHEL for the post of CEO of Petronet LNG Ltd). Sarraf’s political boss at that time was none other than Veerappa Moily who was extremely friendly with RIL. Permit me to recall a little history of that period to enable my readers to understand the situation a little better. Prime Minister Manmohan Singh had reshuffled his cabinet in which Murli Deora was shifted from the Ministry of Petroleum to Corporate Affairs. How could a heavy weight like Deora, a fund collector for the party, be shifted from the cash-rich petroleum ministry? Nobody could predict it; not even Reliance. It was Deora who wanted to be shifted, exhausted as he was under the relentless pressure from powerful lobbies. He was replaced by Jaipal Reddy who came with a mandate to get tough with RIL. Reddy weeded out almost all bureaucrats who were perceived to be pro-RIL. But soon there was a coup in which Reddy was shunted out. Veerappa Moily, who succeeded Reddy, started playing an exactly opposite role and RIL completely re-established its clout.

ONGC’s action on gas migration under Sarraf’s leadership coincided with the momentous change in the ministry. There was no way that ONGC could have moved the Delhi High Court on the gas migration issue without making the petroleum ministry a party to the case. The ministry has to be a necessary party as it was the one which awarded the blocks and signed the terms and conditions of the Production Sharing Contract.

By sucking out gas from the adjacent block, RIL had violated the terms of the PSC that it had signed with the ministry. That brings me to a question: How many CMDs in ONGC would have dared to initiate such a move? Had the UPA returned to power with or without Moily as petroleum minister, Sarraf would not have been confirmed in his post.

This was risk that Sarraf took – and one needs to acknowledge the guts and gumption that he showed in taking action that has never been seen in PSU history. Sarraf is basically a finance man and would not know anything about geology. This was essentially Narendra Verma’s discovery -- and I am not minimising the importance of his contribution. By acting swiftly soon after becoming the director (exploration), Verma exposed his illustrious predecessors who sat over the G&G data. Whether their inaction amounted to laxity or collusion will be revealed only after the investigation recommended by the Shah Committee is completed. The nature of the investigation will provide a clue to the importance that the government attaches to the issue of uncovering the role of collaborators within ONGC. My inquiries reveal that a daring bureaucrat who was on the board of ONGC at that time was a great source of support for Sarraf and Verma. For obvious reasons, I would not like to disclose his identity. He had been brought into the ministry by Reddy.

The point I am labouring to make is that the honours for exposing the gas migration saga should be shared between Sarraf and Verma. We may, however, quibble over the proportion in which we want to divide it.