Lokhande almost ready with CBM cabinet note

Vol 19, PW 23 (28 Jul 16) People & Policy

Prashant Lokhande, a director in the oil ministry, moves to Beijing next month (August) to take up a three-year position at the Indian embassy.

Before he goes let's hope he completes his 'Note' for the cabinet under preparation for the past year on long-awaited amendments to India's CBM policy, originally approved in 1997. "The DoPT (Department of Personnel and Training) is yet to issue his transfer orders," we hear.

"They are expected any day." Lokhande is looking at two key areas, according to an oil ministry source: CBM gas pricing, and the calculation of unfinished work programme costs at relinquished blocks. Striking the right balance is critical if the ministry is to achieve the PMO's ambitious target delivered in March 2015 to increase total CBM production in India over the next five years from a little over 1m cm/d today to 5m cm/d.

When in October 2014 the government released its latest gas pricing formula CBM was left out. Today it is sold at hugely varying prices across India - from $6/mmbtu to 14/mmbtu.

"There must be a floor and a ceiling price," stresses a ministry source. In addition the ministry wants to fix a uniform penalty for unfinished work programmes as it has done for NELP blocks.

Under PSCs from the NELP-VIII and NELP-IX rounds operators pay $1m for onland, $3m for shallow water and $6m for deepwater wells committed but not completed.