Press Releases

  • Hydrocarbon reforms unstoppable: Ram Naik

    13 January 2004

    Union Petroleum Minister, Mr Ram Naik today sought to reinforce the reforms commitment to the hydrocarbon sector in India by announcing a slew of measures. He also announced the setting up of a national strategic reserves at the cost of $350 million and crude worth $1.5 billion. The new reforms measures included the 5th round of New Exploration Licensing Policy (NELP) in May, finalisation of a 7000 km National Gas Grid pipeline and the 3rd round of Coal Bed Methane (CBM) and a nation-wide agenda for Ethanol blending in both Petrol and Diesel. He said the reforms process was irrevocable and would continue in all the three areas of refining, exploration and marketing.

    Inaugurating the Fifth Indian Oil and Gas Conference (IOGC 2004) organised by The Energy and Resources Institute (TERI), he said the government has successfully blown away the clouds of apprehension about India's commitment to liberalisation. "With the dismantling of the administered price mechanism (APM) in 2002, the oil sector has been deregulated fully. Through New Exploration Licensing Policy (NELP) exploration was opened. The marketing sector has also been deregulated and marketing rights have been granted to private players," he said.

    Supporting the minister, Petroleum Secretary B K Chaturvedi said India still hadn't achieved the full potential in the oil and gas sector. "According to Goldman Sachs, in the next five decades, the BRIC economies (Brazil, Russia, India and China) will be the fastest growing economies. We are making efforts to maximise deep sea exploration in the Eastern offshore. This is because of some evidence that there is much more gas in the Eastern coast." He said that according to the Vision Statement 2025, the gas consumption in India would go up in power generation from the current 7% to 25%. Simultaneously, crude oil consumption will decline from the current 35% to 25%.

    Speaking on India's energy security concerns, Dr R K Pachauri, Director-General, TERI, said some of the cardinal concerns regarding this subject could be addressed through the restructuring of the transport sector. Other equally relevant measures are: enhancing natural gas imports and consumption, bringing in renewable energy supply into the mainstream, reforming the power sector, strengthening the role of an independent regulator for energy supply and demand. "We also need an integrated energy strategy." Referring to the recent thaw in relationship with neighbouring countries, Dr Pachuri felt that the idea of a gas pipeline from Iran could be revived again.

    Dr Ferediun Fesharaki, President, FACTS Inc said that India was poised to play a major role in the complex energy world. Supply side and demand side as well as projected scenario all needed to be counted in when we look at the Indian scenario, he said. He said that though conversion of natural gas to Compressed in Natural Gas in some of the Indian Mega cities has removed about 20-30 kb/day of diesel from the market. "While environmentally, desirable, the economics of CNG for India are highly questionable, particularly when the gas is imported. CNG is ideal for countries which have plenty of cheap gas or flared gas, such as Iran. But converting $4-5/mmBTU of imported gas into CNG makes no economic sense," he said.

    Indian Oil and Gas Conference is a confluence of the captains of the industry - both Indian and International. IOGC is widely regarded as platform for policy and strategy discussions. The coference will end on January 14.