Big oil bill behind moves to accelerate exploration and production

Vol 3, PW 24 (22 Dec 99) People & Policy

Look no further than Indias massive oil import bill for the reason why the government is stepping up efforts to increase exploration and production.

Figures from the Ministry of Industry (see below) predict that India will have to pay Rs54,000 ($12.6bn) for its oil imports in the financial year to April 2000. This is more than double the Rs24,713 ($5.75bn) paid last year, and explains why the oil ministry has made exploration and production a priority.

I personally feel that in the days to come we will have to go for exploration in a big way, oil minister Ram Naik told reporters this month, Presently we are importing 70% of our petroleum products. There is scope for indigenous production of up to 50% in the next ten years.

This can be done by exploring more fields and by increasing our efficiency in extracting oil and gas from existing fields. Not surprisingly, bureaucrats working in the Indian oil ministry are taking Naiks words seriously.

Oil companies visiting the ministry in recent days report a sense of urgency in the department which looks after oil and gas contracts, with officials working late hours to see outstanding projects through. In one development, ministry officials are in the process of preparing a Cabinet Note with the official recommendations on who should be awarded which block from the New Exploration Licensing Round (NELP), which closed on 18th August.

Naik is expected to present this Note to his cabinet colleagues in the days to come. Meanwhile, officials looking after the NELP awards have switched their attention to a list of 12 outstanding PSCs which have remained unsigned for the past three to five years.

This report understands they are in a hurry to clear the PSCs before reverting back to NELP. National bill for import of crude and petroleum products Year Quantity in million tonnes Value 1993-94 42.9 $4.13bn 1994-95 41.3 $4.15bn 1995-96 47.7 $5.6bn 1996-97 54.2 $7.96bn 1997-98 54.0 $6.6bn 1998-99 58.6 $5.75bn 1999-2000 (projection) 70.0 $12.6bn