FEB 17, 2002
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The Salary Slump
After being sandwiched for years, the middle manager may finally be closer to getting his just share of the salary sweepstake. According to compensation experts, the next fiscal will see the middle managers getting bigger increments than they have in the recent past.

Stanley Fischer Unplugged
He has the rare distinction of having advised through the half-a-dozen economic crises of the 90s. But now economist Stanley Fischer is calling it quits at the International Monetary Fund, and joining Citicorp as Vice Chairman. In India recently, Fischer spoke on IMF, India, and the global recession.
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Chips, Rigs, And Black Gold
Wireless and microchips have helped ONGC achieve world-class efficiencies on its offshore rigs-just one reason why India's largest oil producer is spending Rs 700 crore to wire itself up.
Rigs like this can remotely control up to 15 unmanned platforms

The choppy waters of the Arabian Sea can be unnerving to the novice. That the site is potentially a high-risk target for enemy missiles in the event of a war with Pakistan only makes it more dangerous. The loud rattling sound of 45,000 barrels of crude as it noisily blunders through the pipeline to Mumbai every month could easily make a visitor wonder if rivalries have already begun.

These are not worries for old hand Rajiv Singh, an engineer with the Oil and Natural Gas Corporation (ONGC), as he goes about his dawn-to-dusk work routine, analysing data pouring in from 750 offshore wells. The wells are spread over 1,200 square km, and make up the fabled area we all know as Bombay High. Sitting in a control room nearly 160 kms off Mumbai on a spider-like rig with three iron and steel arms, Singh is one of about 100 engineers from ONGC who makes his home here for 14 days at a stretch.

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Suddenly a beep on a monitor tells Singh that the pressure of oil flowing out of a group of rigs has fallen sharply. After some routine checks, he taps a few keys and flips a few switches. Instantly, the meter shows the pressure of crude oil outflow from those oil wells has dropped to zero. Singh has successfully closed the faulty valve at six of the wells, located some 3 km away.

What's remarkable is that there isn't a soul on those rigs. If he so wanted, Singh could even switch off the motor or pumps that extract crude oil from the sea bottom. Tomorrow, a team of two engineers will visit the unmanned platform the next morning and make sure everything gets back to normal.

Unmanned rigs, controlled by microchips and wireless, have helped ONGC achieve world-class manpower and functional efficiencies-but only on its offshore rigs. This is just one aspect of the wired life at the daily operations of India's main crude oil producer. ONGC, also the largest Indian oil exploration company, is now in the process of setting a new computer network that could be one of India's hottest.

ONGC: FAST FACTS
» Number of Oil wells 4,700 (700 offshore)
» Oil production 24.7 million tonnes*
(Total Indian demand: 80 million tonnes)
» Revenues Rs 24,270 crore**
» Number of employees 40,226
» Number of PCs More than 8,000
(* in March 2002) (** March 2001)
"Our business is helped by knowledge"
Chairman, ONGC

The Wired Lifeline

''We are not in the knowledge business," says Subir Raha, Chairman and Managing Director of ONGC. "But our business is helped by knowledge.'' He needs the network, he adds, to help manage his 40,226 employees-the company intranet is accessed by 700 people every day-scattered in far-flung locations across India. He needs it to control and manage oil production, gradually even pricing, as ONGC's output gets set to touch 24.7 million tonnes by March 2002-that meets a critical 30 per cent of India's oil needs. The successful wireless operations offshore, are now going to be replicated onshore.

Raha's penchant for wiring up was not particularly easy to justify to his board though, whose approval he had to seek before spending more than Rs 700 crore over two years on ONGC's it infrastructure. It was certainly one of the largest it budgets of any Indian company. But Raha, formerly with Indian Oil Corporation (India's largest oil company), had done his homework. He was quick to point out that ONGC was using six different computer systems for different divisions. It was a wired mess. All of them needed to be brought on to a common platform to ensure smooth decision making. The benefits that would accrue from an on-tap information process, to him, went beyond quantification.

ONGC's big spend on wiring up couldn't have come at a more opportune time. With the dismantling of the administered price regime from April 1, 2002, ONGC needs every efficiency it can muster. The company will no longer continue with its one-price-fits-all philosophy. Based on real-time data of oil production, its pricing mechanism will vary prices between customers. And a year from now, ONGC wants to morph into just-in-time production methods to meet the demands of a globalising market.

''The idea was to put all the systems on the same platform, technical and managerial,'' says A.T. Kabilan, a mechanical engineer who has earlier served a four-year stint at Bombay High. ''With the different systems that various departments in ONGC have, it would not have been possible for a senior executive to take effective decisions quickly.''

HOW WIRING UP WORKS FOR ONGC
» ONGC had separate networks for HR, finance, materials management, production and other functions, which ran independent of each other-a wired mess.
NOW The new network will encompass all operations of the company.
Decision-making will be instantaneous.
» A problem or glitch on unwired onshore rigs could take up to two days to locate. Engineers then had to establish its nature.
NOW The new network will monitor oil flow real time, as on the unmanned wired offshore rigs. Less wastage, lower costs.
» Pricing wasn't really a problem for ONGC's accounting system-one price fitted all over the last few decades.
NOW With the dismantling of the administered price regime from April 1, ONGC-aided by real-time data of crude oil production-will vary prices between customers.
» Managing employees in locations in the remotest corners of India was a nightmare. Communications could reach employees after nearly 15 days.
NOW The company intranet, accessed by nearly 700 employees every day, has made communication instantaneous.

Some 160 kms off the coast of Mumbai, there are 140 unmanned platforms and another 14 manned platforms. Each of the 140 unmanned platforms have 10-12 oil wells around them, which are wirelessly connected to the control room at the manned platform, with nearly 100 personnel working at any point of time. The control room monitors the flow of oil 365X7 through the 203-km long pipe that ferries the crude oil inland. After making landfall, the oil pipeline is diverted to Uran in Maharashtra, the gas to Hazira in Gujarat. To ensure that the wireless connectivity between the platforms, the control room, the pipeline, and the plants never goes down, ONGC has satellite back-up, in case the radio link goes down.

One million tonnes of oil can cost nearly Rs 350 crore at the current prices. So it's very important for the public sector monolith to minimise wastage. Every fault is a few crores down the drain. ONGC's system can pinpoint faults, localise them, then direct engineers for repairs. Tackling a fault as soon as it is detected not only saves oil but also minimises damage caused to a rig.

The only way these critical unmanned platforms can be effectively managed is through a 24X7 information network. That is another reason why all critical information about the functioning of the oil wells around a rig is available at the tap of a button. The platform is just large enough for a helicopter. A team of two engineers visits nearly three such platforms each day to physically inspect that all is well.

The control room at the manned platform has a team of 10 engineers with varied specialisations. They could remain offshore in Mumbai, but a one-way 45-minute helicopter ride to Bombay High costs about Rs 24,000 per head.

Another great challenge in offshore drilling is to keep the machinery in running condition. Again, the network steps in. Sitting at the control room and monitoring oil extraction in 700 wells, controllers like Singh can explore the drilling system-much like a physician runs a stethoscope over a patient-and see how turbines, motors, and pumps are working. But while over 70 per cent of daily operations are managed through the wired system, the onshore figure is half of that.

Much of the efficiencies ONGC wants to bring about will come from wiring onshore wells. From the lessons learned from the wireless offshore network, the company hopes that the regular maintenance visits of its engineers to its 4,000-odd wells spread across India will reduce dramatically.

Oil can be a slippery-and costly-business. One small mistake and the cost of drilling for each well, estimated at between Rs 50-100 crore, can go down the drain. Precision of decisions, and information, is the key to efficient operation.

If countrywide wiring up works, leakages can be monitored instantly. And it will be possible for one control room to oversee many more wells onshore than is done offshore. The longer the delays, the longer the stoppage in production of black gold-something India can ill-afford with the war clouds that now gather routinely on our horizons.

 

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