ONGC likely to shelve retail, SEZ forays in new biz plan
The new bosses at ONGC are putting in place a leaner and trimmer business plan, which will weed away some of the earlier business proposals and emphasise on exploration and production.
By Soma Banerjee, TNN |
NEW DELHI: Winds of change at the top levels in ONGC are now beginning to show in the blue-chip company’s operations.
The new bosses at ONGC are putting in place a leaner and trimmer business plan, which will weed away some of the earlier business proposals and emphasise on exploration and production. The first to face the axe will be ONGC’s grandiose retail plans, which were kicked off with an outlet a year back.
ONGC’s dreams of creating integrated oil major may be clipped, with the new business plan set to do away with some of the non-core activities like retailing and marketing and limiting ONGC primarily to its core activities of exploration and production.
ONGC’s former chief Subir Raha had run into major problems with the petroleum ministry over the company’s proposals to take up downstream activities and evolve into an integrated oil major.
The new plan will be taken up for consultation with the government by mid-July. Other non-related activities like SEZs and wind power projects are likely to be reviewed. Although some downstream activities are expected to continue through MRPL, others may be scrapped. Although officials declined to confirm, there are doubts whether ONGC will continue with its SEZ plans at Dahej and Kakinada.
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ONGC had acquired marketing rights along with MRPL and several others a few others back and had drawn up an expansive plan to enter the retail space. But the government has made it clear that retailing fuel is not in sync with the core activities of the company. Moreover, retailing fuel in the given scenario is unsustainable, unless it is subsidised and it did not make sense for ONGC to take this up as a new business activity.The new wave of downsizing some of its earlier plans has also found takers in the top management of ONGC. Board directors feel that the company needs to take stock of all its proposals and prioritise their spend.
“We cannot take up all of them. There are more than 30 projects and we have to decide which ones to pursue. We have set up a committee to take stock and the new business plan will be discussed shortly.”
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