DGH anger at move to replace it in MC meetings

Vol 5, PW 11 (18 Jul 01) Exploration & Production

Expect fireworks in the weeks ahead as the Directorate General of Hydrocarbons clashes with oil officials over the future powers of a proposed 'Upstream Hydrocarbon Regulatory Authority (UHRA)'.

Petrowatch learns DGH boss Avinash Chandra is upset at ministry moves to slash the DGH's power by removing its right to sit in PSC Management Committee (MC) meetings with overseas oil companies. Chandra has conveyed his unhappiness in a sharp two-page letter dated July 3rd to the new oil secretary Vijayendra Kaul.

His anger is directed at a 40-page report compiled by a 'Working Group' (of which he was a member) headed by additional secretary Naresh Narad, which talks of a "conflict of interest" in the DGH's twin-role as industry regulator and government representative on MC meetings. "The working group feels that the conflict would become sharper once the empowerment of the UHRA takes place," reads the report.

"Regulatory functions and administration of PSCs should be carried out by different agencies." Crucially, it adds: "Prior to the formal authorisation of the UHRA to exercise regulatory power, separate arrangements need to be made to represent the government in the Management Committee under PSC." And who would replace the DGH at MC meetings Members of the oil ministry's 'Contract Cell', which according to the 'Working Group' report could be re-named the 'Contract Management Cell'.