State-run explorer ONGC is all set to get a new chairman and managing director Dinesh Kumar Sarraf after prime minister Manmohan Singh cleared his name for the post on Wednesday. A proposal to extend the term of incumbent Sudhir Vasudeva by oil minister Veerappa Moily was denied by the PM, according to newspaper reports.

Sarraf, 56, is the managing director of ONGC Videsh, ONGC's overseas acquisitions arm, and will take over from Vasudeva who retires on February 28.

The appointment committee of cabinet (ACC) had decided in favour of Sarraf, who was recommended by the government headhunter the public enterprises selection board (PESB) in August last year. ACC, which is headed by the PM, declined Moily's recommendation of giving an extension to Vasudeva against whom there are some pending vigilance cases.

In a statement issued on Wednesday, oil ministry said the extension of Vasudeva was recommended by Moily “purely on merit and in the interest of the organisation.” However, some ONGC board members had questioned the rationale.

PESB had chosen the head of ONGC's foreign arm, Sarraf, as the new chairman after he outperformed three other candidates for the most coveted job in the public sector. Sarraf was appointed as the managing director of ONGC Videsh two years ago to succeed R S Butola. Before moving to ONGC Videsh, Sarraf had worked as the director (finance) in ONGC for about four years.