Vikas Kaushal, a partner and chairman at consultancy major Kearney’s India operations, was appointed chairman and managing director (CMD) of Hindustan Petroleum Corporation Ltd (HPCL), India’s third-biggest oil marketing company by revenue, by the appointments committee of the Union cabinet for a period of five years.
The move marks the first instance of a private sector executive being appointed head of an oil and gas PSU. To be sure, Kaushal has previously worked in HPCL along with other PSUs such as Indian Oil Corporation, Bharat Petroleum Corporation Ltd (BPCL) and NTPC in senior executive positions.
Meanwhile, advertisements by the Public Enterprises Selection Board (PESB) have been pushed out seeking applications for CMD posts in four other central public sector units (PSUs)—Oil and Natural Gas Corporation Ltd (ONGC), NTPC Ltd, BPCL, and NHPC Ltd.
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The move assumes significance given that these companies are market leaders in their domains, and have a pivotal role to play in India’s energy transition goals. While ONGC is India’s largest hydrocarbon and exploration firm, NTPC is India’s largest power generation firm. NHPC is the country’s largest hydropower firm.
ONGC is the latest public sector entity in the energy space for which the PESB has sought applications for the chairman’s post. On Monday, PESB invited applications from qualified candidates, and the last date of receipt of applications is 11 April. The incumbent CMD, Arun Kumar Singh, was appointed in December 2022 for a three-year term.
Some former chairmen of these large PSUs expressed reservations over the process followed and the tenure of the leaders.
A.K. Singh, CMD of NHPC from February 2020 to August 2022, told Mint that the appointment of CMD should be for a longer period than the usual two or three years so that there is time for the vision of the board of directors and the CMD to be implemented.
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“Further, the appointment process also usually takes a few months, so a pool of qualified candidates should be prepared and the government should have a ready list to accelerate the process of selection and appointment,” Singh said. “Energy companies have capex-heavy operations and have heavy investments in hand, which would require management to operate round the clock with decisiveness.”
“There should be much more seriousness in terms of appointment of top management personnel in PSU companies,” R.S. Sharma, who was CMD of ONGC from May 2006 to January 2011, said. “The process should not be delayed, as it can become a long-drawn process in case the PESB’s recommendation is not finalized, and also norms need to be properly followed in terms of these appointments.”
Queries emailed to the Union ministries of power, petroleum & natural gas, ONGC, HPCL, NTPC and NHPC remained unanswered till press time.
The process
For oil marketing and refining major BPCL, the search and selection process is underway as the tenure of its current CMD G. Krishnakumar ends in April. The PESB held interviews of potential candidates on 1 February.
The two top power generators, NTPC and NHPC, would also need new chiefs, with the selection process for the former already underway.
The tenure of Gurdeep Singh, the CMD of NTPC, comes to an end this July. He was given an extension of five years in 2020. His tenure witnessed the largest coal-based power generator’s pivot towards green energy. With a target of 60 GW renewable energy by 2032, its subsidiary NTPC Green Energy Ltd was listed on the stock exchanges in November last year. It has also undertaken the task of setting up India’s first green hydrogen hub in Andhra Pradesh with a projected investment of ₹1.8 trillion.
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NHPC’s current CMD, Raj Kumar Chaudhary, who was previously director (technical) at the Navratna company, would retire on 30 June. The advertisement seeking applications for NHPC CMD was published on 3 March. Applications are to be sent in by 1 April.
Executives from both public and private sector companies can apply for these posts. As per current norms, after shortlisting of candidates from the applicants and interviewing them, PESB sends a recommended name to the Appointments Committee of the Cabinet (ACC), which takes the final decision on the appointment.
Why these companies are important
For ONGC, which in 2023 announced its objective to achieve Scope I and II net zero carbon emission by 2038 and plans to invest ₹2 trillion in the process, a new chairman would have a key role to play in consolidating its net zero plans and expanding the renewable energy portfolio. ONGC aims to install a renewable energy capacity of 10 GW by 2030. Currently, it has 3 GW capacity in the country.
Further, ONGC would play a key role in achieving the government’s target of increasing domestic oil and gas production in order to lower import dependence, along with ONGC Videsh, which takes up projects abroad, and the bid to appoint a new chief comes at a time when some of its projects, including the Mozambique LNG project, are in limbo.
Meanwhile, both BPCL and HPCL play a major role in terms of crude oil and LNG supplies from abroad. BPCL signed long-term deals with Petrobras and Total for oil and gas respectively in February. Further, it would also set up the nearly ₹95,000 crore refinery in Andhra Pradesh, dubbed to be India’s last greenfield refinery project. It also has an ambitious energy transition plan under its ASPIRE programme, wherein it plans to invest ₹1.7 trillion in the next five years.
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Responding to Mint‘s queries, BPCL said that with a focus on talent grooming, the organization has established a robust framework to cultivate well-rounded professionals. In a bid to enrich learning experience, BPCL integrates assignments, board nominations, steering committee participation, and action learning projects into leadership development programs. This comprehensive approach ensures that leaders develop a deep understanding of the business and are equipped to tackle complex challenges, it said.
NTPC’s incoming chief will have to play a major role in expanding the portfolio of NTPC Green and setting up the hub at Pudimadaka, Andhra Pradesh, along with ensuring growth of thermal power capacity amid the government’s renewed push for coal to meet the surging power demand and maintain grid stability.
Another major task for the new NTPC CMD would be to consolidate the company’s position in the nuclear power space, where it has forayed. In May 2023, it signed a joint venture agreement with Nuclear Power Corporation of India Ltd for nuclear power plants. NTPC also plans to have standalone projects, along with developing small modular reactors (SMR) through global partnerships.
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NHPC, on the other hand, has to develop strategic projects including the 11 GW Siang hydroelectric project in Arunachal Pradesh, which would work as a counter to the China’s 60 GW Motok Dam hydroelectric project.
In a recent interview to Mint, its current CMD Raj Kumar Chaudhary, whose tenure ends in June, said that with a reservoir capacity of 13 billion cubic metres, the Siang project would provide resistance against sudden floods if China suddenly releases water during the monsoon season and would act as a reservoir to supply water downstream in case China decides to divert the Tsangpo river (known as Siang when it enters Arunachal Pradesh) during the dry season.
He also said that India’s largest hydropower generation firm would invest around ₹84,000 crore to set up 20 gigawatts (GW) of pumped storage capacity.
