Hiking gas price will be a pressure test for BJP govt

May 19 2014, 05:15 IST
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The Narendra Modi government is widely expected to take steps to boost investor confidence in the oil and gas sector The Narendra Modi government is widely expected to take steps to boost investor confidence in the oil and gas sector
SummaryNarendra Modi government is widely expected to take steps to boost investor confidence in the oil and gas sector

contracts is counterproductive and is undermining the fundamental objective of expediting E&P activities in the country,Ē the official added.

For instance, due to various operational reasons, proposals have been received from contractors for extension of DoC submission period. However, in the absence of any provision in the PSC for extension of the timelines, the DoC submitted beyond timelines is not accepted resulting in non-monetisation of the hydrocarbon discovery. Similarly, there are no provision for extension of time for submission of FDP.

Moreover, the companies that have bagged oil and gas blocks under auction, face roadblocks when government agencies such as ministry of defence, department of space or state administration deny permission to carry out exploration activities in the entire block or part of it. Here, too, there exists no provision to reduce the minimum work programme (MWP) if a part or whole block is not made available for exploration activities.

India has total reserves (proved & indicated) of 760 million metric tonnes of crude and 1,330 billion cubic metres of natural gas, shows the government data. Another task before the government is to come up with a framework for extension of the production sharing contracts for Panna-Mukta and Tapti (PMT) and Ravva fields are going to expire in the next few years.

BG-ONGC-Reliance Industries, joint venture partners in the Panna-Mukta and Tapti (PMT) fields, have already indicated to the government about their intent to seek extension, which expires in 2019. The asset in the west coast accounts for nearly 6.5% of the countryís domestic oil and gas output. Another similar contract that will have to go in for extension is Cairn India-operated Ravva fields in the east coast.

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