Meeting HR Challenges through Organisational Transformation Process in Hydrocarbon SectorJune 13-14, Mumbai Enhancing Competitive

Capabilities in Upstream Business Through

Restructuring (CRC)and Forward Integration

Presented by Dr A K Balayan

at HR Round Table

organised by

ISPe & UPES, Dehrdun

To be a world-class Oil & Gas Company

integrated in Energy Business with

dominant Indian Leadership

and Global Presence

VisionVision

The Need for Change

Increasing Demand for Oil ProductsIncreasing Demand for Oil Products

Changing RegulationsChanging Regulations

Increased CompetitionIncreased Competition

Maturing Portfolios Maturing Portfolios

Environmental ConcernsEnvironmental Concerns

PeoplePeople

OrganizationOrganization

TechnologyTechnology

Strategic Goals

To double accretion of initial in-place

hydrocarbons from 6 billion tonnes to

12 billion tonnes in next 20 years

Improving Global Recovery Factor from

28 to 40% by 2020

20 MMT per annum Equity Oil & Gas

equivalent from overseas by 2020 through

ONGC Videsh Limited (OVL).Contd.

Strategic Goals

Monetisation & Development of small &

marginal fields

Upgradation of Technology & Systems for

Deepwater Exploration & Production

Upgradation of Technology

Emphasis on Safety, Health & Environment

(SHE)

Contd.

To ensure a strong balance sheet, ONGC integrating vertically

All global oil & gas majors are vertically integrated along the hydrocarbon value chain: E&P, ocean and pipeline transportation, refining, fractionation, manufacturing, marketing, petrochemicals, and in some cases, power generation

Vertical integration is essential To safeguard against vulnerability of sectoral companies to

price volatility in the particular sector especially in E&P (upstream)

To obtain stable cashflow by operating across the asynchronous price volatilities in different sectors

To capture value in each sector To obtain flexibility in transfer pricing To cut out transaction costs To enhance and retain market capitalisation, and To secure sustained growth

Integrated majors have been merging to create super-majors in order to minimise costs and to exploit global synergies

Collaboration through People, Processes & Technology

Just do it right !Just do it right !

“People are our greatest asset”

Key New Imperatives

Alliancing/ Long-term contract for

sourcing Deepwater technology and

Drilling systems and EOR projects

Adoption and acquisition of best-in-class

and cutting-edge technology

Technology acquisition

Acquisition of one state-of-the-art survey

vessel

Acquisition of 2 ultra deepwater Drilling

rigs

Alliance with leading deepwater players

Long term open-ended contract with

globally established Service providers

Upgradation of Technology

Seismic Acquisition, Processing &

Interpretation (API)

Drilling & Workover rigs

Production Systems & Installations

MIS & Communication systems

Crisis Management Equipment

Total envisaged Investment to the tune of Rs. 7500 Crore in 3 years’ period.

Project PROMISE (Professional Review Of Major Infocom Systems & Equipment)

To identify areas for improving operations &

performance of major Information Technology (IT), Tele-communications and Process Control Systems.

InitiativesInitiatives

Project EPINET (Exploration & Production Information NETwork)

Common E&P data model for integrated solutions

Digitizing vital Geological & Geophysical (G&G) data (Real wealth of ONGC) to avoid degradation and ensure safety & security

Data Centre at 2 locations- Dehradun & Mumbai- being set up

InitiativesInitiatives

Project ICE (Information Consolidation for Efficiency)

An organization-wide ERP Solution covering all business processes of ONGC on SAP R/3 platform with integration of ongoing projects viz., KUBER, SHRAMIK, IMMS & EPINET

initiativesinitiatives

RestructuringRestructuring

CRC formulated from lessons learnt through

Pilots of Organisational Transformation

Project (OTP) launched in 1997.

Launched with blessings of Hon’ble Minister

(P&NG) on 20.8.2001

CRC roll-out complete – Assets, Basins,

Services etc., in place

•Corporate Rejuvenation Campaign (CRC)

Contd.

RestructuringRestructuring

Time bound special groups/ assignments in critical areas of operation: New & marginal fields development

Deepwater Development

Gas Flaring Reduction

Mini Group Gathering Stations (GGS)

Alliancing

•Corporate Rejuvenation Campaign (CRC)

Contd.

RestructuringRestructuring

Time bound special groups/ assignments in critical areas of operation (contd.): Efficiency improvement & cost reduction –Corporate

Industrial Engineering (IE) Group

Offshore Supply

Corporate Logistics

Fire Services

Crisis Management Operation & Upgradation

HR- Improvement in performance of ONGC Schools

•Corporate Rejuvenation Campaign (CRC)

Strategy for Human Resources Development

HRD Processes

Revision of

Promotion Policy

Career path

Transfer policy

Incentive scheme

Multi Disciplinary Team working

Vision of a Collaborative Team

TeamTeam

An association of people with An association of people with complementary complementary

skills who are committed to a skills who are committed to a common purposecommon purpose, ,

performance goalsperformance goals and and approachapproach for which they hold for which they hold

themselves mutually themselves mutually accountable accountable

(developing an asset)(developing an asset)

Specific FocusSpecific ObjectivesShared VisionInterdependentHighly communicative

Asset / Basin Team

ObjectivesObjectives

InstitutesInstitutes

Multi Multi Disciplinary Disciplinary Asset TeamAsset Team

CustomersCustomers

ServicesServices Collaboration & Collaboration & team workingteam working

RegulationsRegulations

PortfolioPortfolioManagementManagement

Fields / Blocks

Enabling Team Collaboration

Vision, Vision, Objectives Objectives & Strategy& Strategy Performance Performance

Measures & Measures & IncentivesIncentives

Technology & Technology & CompetenciesCompetencies

ResourcesResources

PeoplePeople

ProcessesProcesses

Organisational Organisational StructureStructure

CultureCulture

Collaboration in Asset TeamsVisionVision

Multidisciplinary Collaborative TeamsMultidisciplinary Collaborative Teams

Effective Communication (Virtual Corporates ,..) Effective Communication (Virtual Corporates ,..)

Easier sharing and exploitation of Data, Information, Easier sharing and exploitation of Data, Information,

and Knowledge-EPINETand Knowledge-EPINET

Better Technology and Equipment Better Technology and Equipment

Upgradation of rigs, PROMISE etcUpgradation of rigs, PROMISE etc

Integrated processes-ICEIntegrated processes-ICE

Increased Co-ordination-Vichar seriesIncreased Co-ordination-Vichar series

Rich Support and Backup Rich Support and Backup

(Expert Advice from Services and Institutes)(Expert Advice from Services and Institutes)

HR Practices

Committee of the Board on HRM - with external Director as Chairperson

External reporting of the HR climate- as part of the annual report

Social responsibility- Policy for spending on Socio-economic activities

Encouragement to outstanding sportspersons

Enhancing Human Resource Capabilities

Knowledge Building

Upgradation of Qualification- Unnati Prayas

Management development- Inhouse and External programs

Technical trainings -Inhouse and abroad

- focus on technology absorption

Enhancing Human Resource Capabilities

Knowledge Sharing

Partnership with Institutes

Planned job rotation and transfers

for executive development

Enhancing Human Resource Capabilities

Performance contracts with

quantified parameters

Assessment center for

competency profiling, succession

and development inputs planning

Stakeholders will increasingly demand more information on: HR measures Environment

In future these may even become mandatory

Whether standard HR measures can be agreed upon for all industries?

THANK YOU

Enabling Team Collaboration

Vision, Vision, Objectives Objectives & Strategy& Strategy Performance Performance

Measures & Measures & IncentivesIncentives

Technology & Technology & CompetenciesCompetencies

ResourcesResources

PeoplePeople

ProcessesProcesses

Organisational Organisational StructureStructure

CultureCulture