Giridhar backs PSC reform proposal

Vol 17, PW 3 (05 Sep 13) News in Brief

India’s oil ministry is considering radical changes to the PSCs that govern oil and gas exploration following suggestions made by a panel headed by C.

Rangarajan. Joint secretary exploration Aramane Giridhar told the PetroWorld conference in Mumbai on August 24 that the government might introduce a revenue sharing model to replace the PSC.

“We must take a call on this to ensure exploration is not held up,” Giridhar said. He added the present PSC is the “bane” of India’s E&P sector.

“The PSC reduces the government to a party to the contract where we count pennies and don’t look at energy security or increasing production. We only look if the contractor is wasting money or if it will affect revenue.

” Giridhar said the only way out is for government to stay away from business and move to a revenue sharing model similar to the UK, Norway, US and other developed countries, where disputes are resolved “in favour of business.”