Ph. : (02762) 225355, 262233 (KDM Bhavan) Fax No. : 02762 - 225705 0.N.G.C. EMPLOYEES MAZDOOR SABHA (Regd. No. G-63 Recognized by ONGC) ONGC EMS OFFICE, KDM BHAVAN, PALAVASANA, E H. K. Patel MEHSANA - 384003, GUJARAT A.R. TADVI . President General Secretary [elalele fell No.: EMS/MHN/ONGC/Govt. Interference/2018 Date: 04.09.2018 To, Shri Narendrabhai Modiji Hon'ble Prime Minister of India South Block, Raisina Hill, New Delhi - 110 011 Fax No. # 011 - 23016857 Sub.: Decisions taken by the Government of India hampering the progress of Oil and Natural Gas Corporation Limited - reg. Respected Sir, | am writing this letter to you in the capacity of General Secretary, Employees Mazdoor Sabha (EMS), a trade union body, which represents the majority of staff workers, in the Oil and Natural Gas Corporation Limited (A Maharatna Public Sector Undertaking) in the State of Gujarat. EMS has been extremely supportive of the BJP in the State of Gujarat under your able leadership as the Chief Minister of the State of Gujarat and after the Lok Sabha elections in 2014, we were hopeful that the entire nation would benefit under your leadership as the Prime Minister of India. However, the decisions taken by the Government of India during the past 4 ¥% years have not only badly reflected on the economic growth of the country but it has also adversely affected the growth prospects of our Company, which is the largest crude oil and natural gas Company in India, contributing around 70 per cent to Indian domestic production. |, on behalf of the strong workforce of ONGC, would like to draw your kind attention to the various decision taken by the Government of India under your Prime Ministership, which have broken the economic backbone of the Company. A few of the decisions which have affected severely on the finances of the Company are highlighted as under; (a) During 2016, the Government of India forced ONGC to acquire gas blocks in the Krishna Godavari basin, belonging to GSPC, for a total consideration of nearly Rs. 8,000 crores. This despite the fact that the GSPC’s discovery in 2005 hadn't resulted in any commercial production by late 2015, even after a whopping investment of Rs. 19,576 crores. (ae Branches : Mehsana, Baroda R.O., CWS ‘oda, Geoph. Party, Cambay, Jodhpur(02762) 225355, 262233 (KDM Bhavan) Fax No. : 02762 - 225705 0.N.G.C. EMPLOYEES MAZDOOR SABHA (Regd. No. G-63 Recognized by ONGC) ONGC EMS OFFICE, KDM BHAVAN, PALAVASANA, A) H. K. Patel MEHSANA - 384003, GUJARAT A.R. TADVI - President General Secretary [fa}gletsd dt Page No. 02 Ht It was very clear that the geographical and geophysical conditions in the KG block have made it a technical challenge to explore and develop, owing to factors such as low porosity, low permeability, high pressure, high temperature and a tight reservoir make for geological complexities of the kind which have rarely been tackled by any E&P Company in India. Even after GSPC spent large sums of money, hired foreign experts and imported sophisticated equipments, they could not find gas, then why was ONGC asked to pay Rs, 8,000 crores to acquire this block? It is a clear case that ONGC had been brought in to bail out GSPC for the misdemeanours on the part of the officials responsible for the same. This badly affected the cash reserves of a cash rich Company like ONGC. (b) In a desperate attempt by the Government of India to fund its fiscal deficit gap, it asked ONGC to buy the government's entire 51.11% stake in Hindustan Petroleum Corporation Limited (HPCL) for Rs. 36,915 crore, in an off-market deal which was around 149% higher than the closing share price of HPCL for that day. With this acquisition, the ONGC group debt has risen to Rs. 1,11,533 crore in FY 18 as compared to Rs. 55,619 crore in FY17. On a standalone basis, this deal at a premium valuation has converted ONGC’s net cash balance sheet to net debt one and repressed future growth. (©) The constant interference by the Government of India in the business of ONGC has led to curtailment in the freedom of our CMD and Directors to take decision for the larger interest of the Company, which in turn has badly affected the cash reserves of the Company and turned it from a cash rich Company to a high debt Company. Such is the financial instability of ONGC now that it has to raise Overdraft facility to make the payment of pay and allowances of its employees. Further, it has also hampered the Pay Revision Process of Unionised Employees which is pending w.ef. 01.01.2017 though the pay revision process of Central & State Government had been completed since long. We have never ever witnessed such a situation in ONGC, since its inception and we hold the present Government responsible for the current state of affairs. Further, the periodicity of pay revision for unionised employee which is currently 10 years should be reduced to 05 years as there is no DPE guideline or instruction on the subject oa Branches : Mehsana, Baroda R.O., CWS Baroda, Geoph. Party, Cambay, JodhpurPh. : (02762) 225355, 262233 (KDM Bhavan) Fax No. : 02762 - 225705 O.N.G.C. EMPLOYEES MAZDOOR SABHA (e) i} (Regd. No. G-63 Recognized by ONGC) ONGC EMS OFFICE, KDM BHAVAN, PALAVASANA, H.K. Patel MEHSANA - 384003, GUJARAT A.R. TADVI President General Secretary [eltete ro The Government of India has taken a decision to offer control to private players in several producing fields that were given to ONGC in the past without an auction, whereby players promising higher production will get majority interest in the so-called nomination fields while ONGC will retain minority interest. Under this policy, the small and marginal fields which were uneconomical to develop due to government's subsidy sharing mechanism were to be auctioned for private players to participate. However, it is understood that the fields identified for auction to private players are better performers and account for 15% of ONGC’s output. The nomination fields account for nearly 85 per cent of ONGC’s crude output and the decision to hand over these fields to private players will cause ONGC more harm than good. This is already evident in the case of Panna Mukta and Tapti fields which were awarded to private players two decades ago. Handing over control of ONGC’s field to private players is an irreversible process and may lead to severe setback to national interests. It is observed that over the last 3-4 years, the Government of India and its Ministers across the country are targeting ONGC and other Public Sector Undertakings and exerting huge pressure on these Companies to increase their CSR spending on the various projects, which otherwise should have been sponsored by the Government of India. The major Projects conceived by the Government of India viz. LPG distribution, construction of toilets, adoption of villages for development, providing solar lights and distribution of sanitary napkins in girls’ school, to name a few, are being funded by ONGC and similar PSUs which leaves with very little or less funds for the concerned work centre to focus on supporting responsible and sustainable initiatives in the areas where they are operating. It is agreed that though these initiatives are a welcome step for having a positive impact in the people's life, to enable them live a dignified life in a clean, healthy and safe environment, the government should meet these expenditures through the annual allocation of budget and not from the mandatory spending of CPSEs under the well laid down CSR Policy. The Government of India is trying to gain undue mileage by implementing its projects forcefully through the CSR funds of CPSEs. The Government's intention of interfering in the decision making and spending by ONGC is also evident in its selection of Dr. Sambit Patra as an Independent Director of ONGC, who otherwise does not quality for the said post, as the selection has been challenged in the highest court of the country, Ape Branches : Mehsana, Baroda R.O., CWS Baroda, Geoph. Party, Cambay, JodhpurPh. (02762) 225355, 262233 (KOM Bhavan) Fax No. :02762- 225705 O.N.G.C. EMPLOYEES MAZDOOR SABHA (h) (Regd. No. G-63 Recognized by ONGC) ONGC EMS OFFICE, KDM BHAVAN, PALAVASANA, H.K. Patel MEHSANA - 384003, GUJARAT A.R. TADVI President General Secretary [elgtete Ht Page No. 04 #4 Today, the Company is not being allowed to take major decisions with regard to its spending on capex related to procuring of essential safety equipments, infrastructure building, technology upgradation, personal protective equipments for safeguarding the safety of our own, employees. Our repeated request(s) to ONGC Management for upgradation of existing facilities, infrastructure, safety equipments, tools etc. are often being turned down/delayed on account of non-availability/shortage of budget for the same. Sir, ONGC is the Top ranked Energy Company in India and has the unique distinction of being a Company with in-house service capabilities in all areas of Exploration and Production of oil and gas and related oil field services. Any further interference in the activities of ONGC shall be counter-productive and will be a great loss to the Nation as well as the National Exchequer. |, therefore, request your good self with folded hands to pass necessary instructions to all concerned in the Ministry within 03 months to give a free hand to ONGC to take its own decision in this regime of competitive global business scenario. Any further interference in the internal affairs of ONGC shall be condemned in the strongest possible means including resorting to any direct action, as deemed fit, by the Confederation of Trade Unions in ONGC, without giving any further notice. With regards, Yours sincerely, R q 4 R. TADVI ) General Secretary ONGC Employees Mazdoor Sabha Copy to : Sh. Dharmendra Pradhanji, Hon'ble Minister, MoPNG, New Delhi C & MD, ONGC, New Delhi All Director, ONGC, New Delhi ED - Chief ER, ONGC, Dehradun All General Secretaries of Recognised Trade Union of ONGC President / General Secretary, ASTO, New Delhi Onawne Branches : Mehsana, Baroda R.O., CWS Baroda, Geoph. Party, Cambay, Jodhpur