Exploration policy up for review, pvt firms to share subsidy burden

Petroleum Minister Mani Shankar Aiyar today announced a review of government's exploration policy in order to attract greater Indian participation.

He also said that Reliance and stand alone refiners like Mangalore Refinery and Petrochemicals Ltd would be asked to share the subsidy burden of the oil marketing companies.

Stating that there was a need for lot more foreign technology and capital, Aiyar said Petroleum Federation of India would be conducting consultation with private and domestic firms to identify problems relating to the New Exploration and Licensing Policy.

"It will suggest refining NELP 1997 or suggest completely new licensing policy," he said while addressing reporters at the one-day Petrofed conference.

Admitting that there was need to free domestic retail prices to attract investment, Aiyar said the government could not, however, burden the common man.

He said that there was no law by which private companies could be asked to share the burden of under-recoveries of oil marketing companies but added that these companies could help the government by adhering to the equitable burden sharing concept.

The price of the Indian basket of crude oil on Wednesday hit an unprecedented high of $56.56 per barrel from $55.67 the previous day. The Indian basket of crude oil comprises Oman-Dubai sour grade of crude and Brent dated sweet crude in a 57:43 ratio.

The average price of the Indian basket of crude oil for the current financial year was $50.22 per barrel till July. 6. In 2004-05 (April-March), the average price of Indian basket was $39.21 a barrel.

The minister said another committee under Special Secretary in the ministry of petroleum and natural gas MS Srinivasan and Shell India Chairman Vikram Singh Mehta would undertake a micro study to get international players in upstream and midstream sectors and make suggestions regarding allowing then into the marketing stream.

On what were the issues which emerged from the fifth round of NELP, he said companies which were not successful have said that merely assessing the bids on the grounds of number of wells to be drilled was not enough.

They felt that too much of importance was being attached to the work programmes. He said the government was open to the idea of allowing open acreages system.