 "Filed suit against govt to expedite pricing case: Agarwal")
Cairn India, a unit of Agarwal-led Vedanta Group, had in December filed a suit in Delhi High Court seeking direction to government to extend its contract for the prolific Barmer oil and gas block in Rajasthan as well as give a better price for crude oil produced from the block.
Read more from our special coverage on "CAIRN INDIA"
“We have gone (to Court) to help the government... it can help them decide faster,” he told PTI in an interview here.
Cairn sells Rajasthan crude oil at a discount of 25 per cent to the widely traded Brent crude oil. With 80 per cent of the revenue generated from oil sale going to the government by way of taxes, royalty, cess and profit petroleum, international crude oil prices will help it more, he said.
“We are ready to give (oil) to the government at whatever price they fix. But when we supply to the private (refiners) we must be allowed international prices,” he said.
Explaining the rationale for going to the Court, he said, it is a ‘very genuine’ demand and “we have been telling this to them (government) for the last two years” but no action has been taken.
With global oil prices dipping to a decae low, 25 per cent discount is making things worse. “So we thought they are taking time to take a decision and so let's go to the court,” he remarked. The same indecision had plagued extension of Rajasthan oilfield licence beyond its current tenure ending 2019-20.
“Same thing with the extension. We need to make a big investment for our expansion” and need clarity about the licence before deciding on it, he said. The licence condition stipulated that if there is a gas discovery in the block with reserves to be produced, a 10-year extension is given automatically, he said.
“We have produced (gas from the block) for the last one-and-a-half to two years. We have also notified them. But, it's not happening and probably with the court, it might help them,” he commented.
Agarwal, who is the Chairman of London-listed Vedanta Resources, said his company didn't want to go to the court and wanted things to be simplified.
Asked if he was unhappy with the pace of decision making in the present government, he said, ‘See, definitely everything can be better.’
Prime Minister Narendra Modi's talk of Indian economy expanding to $20 trillion was possible but an “atomosphere needs to be created where industries come up and lakhs get job. You have to simplify.”
“It is very difficult today to start a big company or project in India even though the government's intention is there,” he said.
Asked if controversies like the debate on intolerance and JNU row deter foreign investors, Agarwal said such things also happen in England and there are issues like racism in America.
“But, being a democracy you can't stop this,” he replied. “Definitely they have an effect. But if you simplify the process this thing will not affect.”
“With two-third majority, the BJP-led government's intention to take the country forward is absolutely there. They are very keen to get foreign investors. I would say that the Indian entrepreneur is the best bet for them,” Agarwal said.
“They should create more Indian entrepreneurs and support the existing ones. Foreign investors, of course, are very important, but what Indian entrepreneurs can do is more.” he said
They have created telecom companies, established ports, bridges, etc. They can bring in bigger investors from outside through collaboration," he said.
Agarwal said all that is not touching the government is progressing like IT services industry, pharma and software.
"India is a democratic country and nowhere in the world democratic countries run businesses, except in India," he said referring to large presence of government through state-owned enterprises in businesses spanning hotels to mining.
In US and Europe, 80 per cent of the enterprises are board-run corporations and 20 per cent are family run businesses. "India hardly has any corporation. You have ICICI Bank, Larsen & Touubro, HDFC and ITC, just it," he said.
India, he said, is a land of entrepreneurs -- young, vibrant.
"You have to allow them to come in (to set up businesses in) very simple manner," he said adding Vedanta is only natural resources company in India while the country needs at least 10-15 more such firms to come.
Agarwal said the current oil low price scenario is time to reflect how costs can be cut by bringing in better engineering and better products.
"And I'm very pleased and believe that if we hold this ground for a while, we will be the biggest winner because we are a long-term player. I always tell my people that everybody is going to die, but we must die last," he said when asked about impact of low oil and commodity prices on his companies.
He said his companies are still making profits. "If you see, oil prices have recovered, iron ore prices are recovering and so are zinc prices. And as we are low cost, we will last longer."