OIL MINISTRY TABLES ANTI-MULTINATIONAL REPORT

Vol 3, PW 7 (28 Apr 99) People & Policy
     

Indias latest report on the future of the oil and gas sector is disappointing, to say the least.

Ambitiously titled, India Hydrocarbon Vision 2020, it is anything but visionary; more a series of reactionary proposals designed to strengthen national oil companies and discourage foreign investment. Devi Dayal, Additional Secretary, in the oil ministry, and the man responsible for the report, is known for his antipathy to foreign entry.

Principal recommendations:- *Strengthen ONGC and Oil India because oil exploration of India by foreign multinational has had no success and is of limited value. *Government equity in Indias state-run oil companies should not go below 51%, for national security reasons and to ensure uninterrupted oil supply.

*Foreign multinationals should not be allowed to enter refinery projects unless they add capacity or share "strategic and social responsibilities". *Marketing of oil products should be allowed only to companies that undertake refining and exploration.

*Encourage mergers of Indian oil companies to create Vertically Integrated world class corporations. The report repeats the by now familiar mantra for the creation of three regulatory bodies, but as usual gives no time-table:- *Hydrocarbon Regulatory and Development Authority (HRDA) - to regulate the upstream sector.

*Natural Gas Regulatory Board (NGRB) - to regulate the processing, distribution, transport and marketing of gas. *Petroleum Regulatory Commission of India (Petrocom) - to regulate all downstream activities.

Perhaps the only upside to the current political turmoil is that "India Hydrocarbon Vision 2020" will remain on a shelf somewhere in the oil ministry gathering dust. Cabinet approval is required for its implementation, but as there is only an interim government, this appears unlikely.