Govt mulls SWF to buy oil, gas blocks abroad

Written by fe Bureau | New Delhi | Updated: Dec 24 2010, 02:57am hrs
The government is planning to set up a sovereign wealth fund (SWF) to acquire oil and gas blocks abroad and is taking serious steps to encourage both state-owned and private players to buy energy assets in other countries, government officials said here.

The National Manufacturing Competitiveness Council is examining the feasibility of setting up an SWF to acquire raw materials and assets from abroad not only in the energy industry but across all sectors. We are awaiting their recommendations, said Vivek Kumar, joint secretary, petroleum ministry, at a round table on overseas energy acquisition to ensure Indias energy security organised by industry chamber CII.

The ministry will encourage both public and private players buying energy assets in other countries with the backing of the government, he said.

Indias petroleum products demand in the 2010-11 is expected to go up to 146 million tonnes, and its growth rate is the second fastest in the world at 4.3% a year, as per official estimates. Setting up an SWF, joint-bidding with countries like China, oil diplomacy with resource rich countries and collaboration with the private sector to gain access to technology would be the key elements of Indias approach to ensuring energy security.

Prabhat Kumar, joint secretary handling energy security in the ministry of external affairs said that usually it is countries with large current account surplus that set up SWFs, whereas India has a deficit. India is now in discussions with Nepal in hydro-power, he said.