Updated: April 5, 2021 8:47:48 am
I cut my teeth in India’s petroleum sector under the guidance of G V Ramakrishna (GVR), former secretary, petroleum (and much else), who passed away two weeks ago. This article is not an obituary, but a tribute. More so, it is to reinforce the message that “a few good men” can leave an indelible mark on public policy. And it is to remind policy practitioners of the wisdom of Edmund Burke’s forewarning that “all it takes for evil to triumph is for good men to do nothing”. In the context of this article , the word “evil” should be read to mean the trap of antediluvian status quo.
Ramakrishna was appointed secretary, petroleum in February 1985. I had returned to India as an advisor to the PSE, Oil India, a few months before. GVR has, in his autobiography, written inter alia about the pressures he faced regarding the award of the Rs 1,700 crore HVJ gas pipeline to a French consortium instead of an Italian corporate. The latter were apparently favoured by the political leadership. I was not exposed to these dynamics. My involvement was limited to supporting his efforts to reinvigorate oil and gas exploration and production. The reason I believe this article warrants space on an Oped page is because the changes that GVR wrought in this area have had an enduringly positive ramification and exemplify what individuals can achieve through principled, determined and clear, strategic leadership.
GVR came to the petroleum ministry at a time when India was struggling to manage the sharp rise in international oil prices. The price had been $4.75/ barrel in early 1973, but following the Yom Kippur Arab Israeli war in October that year, it had moved onto an upward trajectory and by the end of the decade it had doubled to $9.35/bbl. Then, in the aftermath of the Islamic revolution in Iran in 1979 and the commencement of the Iran-Iraq war in 1980, prices had peaked to an average of $35.75 in 1981. In Inflation adjusted terms, this would be equivalent to $117.30/barrel today. Prices had started to soften around the time GVR took charge of the ministry. But concerns about supply security had not abated. There was a consensus that exploration and production of indigenous hydrocarbon resources had to be intensified and that international capital and technology should be solicited. But the undercurrent of bureaucratic and political sentiment to keep control of this sector remained strong. As a result, the terms and conditions offered were not attractive and the government’s invitation to the international companies to bid for exploration rights had found few takers.
GVR adopted a more realistic stance. Whilst he had a high regard for the capabilities of the PSEs, ONGC and Oil India, he also knew that the bulk of India’s hydrocarbon reserves were in high-risk, complex geology and harsh topography and that the probability of first locating these reserves and then, developing them on a commercial basis would be considerably enhanced with the supplementary efforts of international majors and state of the art technology.
He, therefore, rewrote the terms and conditions of the exploration contract. The ensuing “third round” of bidding was successful — arguably, the most successful to date, at least when looked through the prism of the quality and diversity of the companies that responded. This laid the basis for all subsequent bidding rounds including those held under the umbrella of the “New Exploration Licensing Policy“ (NELP).
GVR was also prescient in placing gas on the same pedestal as oil. Gas had until then been regarded as a poor cousin of oil. When found in association with oil, it received sporadic attention. And when not so associated, it was treated indifferently. This was because unlike oil, gas was difficult to store and therefore monetisable only if and when the downstream transport pipeline infrastructure and markets were in place. GVR recognised the importance of developing terms that incentivised the creation of an umbilical connect between the exploration, production, transportation and the marketing of gas and he asked me to work on this issue. (On a personal note, I am saddened I cannot hand over to him the book, Natural Gas, The Next Stop: India’s Journey to a Clean Energy Future which I have edited and which Harper Collins will place on the stands next week. I believe he would have appreciated the fact this book looks at natural gas through a holistic, integrated prism.)
John Maynard Keynes is reputed to have responded to the accusation of inconsistency with the words “ When facts change, I change my mind. What do you do, sir ?”. I do not know if the attribution is correct, but I do know GVR was of a similar bent. He recognised early that the “facts” of the petroleum business had changed and that the time had come to move it down from the commanding heights that it had occupied for decades. This could not have been easy because of the strong vested interests opposed to change. But he succeeded because like the captain of a ship caught in a storm whose priority is to steer the ship to calmer waters but not lose sight of his final destination, GVR navigated the clashing dynamics without confusing the trees for the forest.
GVR was an exemplary civil servant. He recognised the thin line that divided the architects of policy from the preferment of advice. Politicians were elected to define the former; bureaucrats were responsible for the latter. GVR spoke truth to the political powers that were but he also respected their distinctively different roles and accountabilities. Today, as the world struggles to adapt to the challenge of the unexpected, whether it be a zoonotic disease or the swerve of a container ship that then clogs up 10 per cent of global trade, these are the qualities of leadership that public servants should hold onto. It will stand them in good stead.
This column first appeared in the print edition on April 5, 2021 under the title ‘A few good men’. The writer is chairman, Centre for Social and Economic Progress (CSEP)
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