 "Limited tenure of production-sharing pacts deters investment: Vedanta Resources CEO")
“Limited tenures with multiple renewals do not allow investors and companies to put in place business plans that maximise output over the economic life of the field,” said Albanese. The petroleum arm of Vedanta Resources, Cairn India, is currently seeking extension of the contract for Rajasthan oilfields beyond its current term ending in 2019.
According to Albanese, not allowing the private sector to fully exploit non-conventional hydrocarbons such as shale gas is one of the reasons behind the uncertainty in the Indian policy environment.
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He said these were anomalies that need to be corrected by the new government, which could begin by linking oil & gas prices to international markets and setting up an independent regulator for the sector.
Albanese also praised the oil ministry’s latest move to introduce a revenue-sharing model that will replace PSCs. The new regime, where companies will bid upfront the quantity of oil & gas they will share with the government, will replace the PSC regime that allowed investors to recover all their costs before sharing any spoils with the government.
The former Rio Tinto CEO said oil & gas majors such as ExxonMobil and Shell do not have significant presence in the Indian market. “Lack of international majors is leading to difficulties in tapping the best technologies and processes necessary to leverage domestic potential. We should be attracting them back to India,” he said.
Speaking on the latest Supreme Court order, which held all the 195 coal block allocations since 1993 as illegal, Albanese said the judgment “reinforces the importance of having a diversified energy portfolio and increasing domestic oil & gas production.”
He added that India should not be importing as much coal as it imports now as the country has some of the richest coal resources in the world. India’s coal imports jumped 17 per cent to 171 million tonnes in the last financial year.