Economic Editors’ Conference 27th October, 2010 Opening remarks by Shri Murli Deora, Minister for Petroleum & Natural Gas

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Press Information Bureau

Government of India

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Ministry of Petroleum & Natural Gas

Economic Editors' Conference 27th October, 2010 Opening remarks by Shri Murli Deora, Minister for Petroleum & Natural Gas

New Delhi: October 27, 2010.

 

Friends from the Media, my colleague in the Ministry Shri Jitin Prasada, Secretary, Shri S. Sundareshan, other senior officials of the Ministry of Petroleum & Natural Gas and the representatives of the Oil & Gas Public Sector Undertakings.

 

2.     The importance of oil and gas in meeting the energy requirements of the economy is paramount.  Oil and gas accounts for more than 40% of our energy sources.  Although, there has been increase in domestic availability of petroleum products, the country is still dependent on imports of petroleum and petroleum products, to the extent of around 80% of total consumption in the country.

 

Production of Oil & Gas

3.     It is my pleasure to share with you that in addition to the 15 new oil discoveries by ONGC, OIL and Private/Joint Ventures companies during 2009-10 that helped to increase the availability of crude oil production by 11% and natural gas by 53%, there will be an additional increase of 12.67% in crude oil and 12.80% of natural gas during 2010-11.  The indigenous production of crude oil is projected to increase to 37.96 million metric tonnes during 2010-11. Natural gas availability would be 146.82 mmscmd during the year. A background note on the achievements of the petroleum and natural gas sector during the course of the year has been circulated.

 

Pricing of Four Sensitive Petroleum Products

4.     In the light of the recommendations made by the Kirit Parikh Committee and after detailed deliberations, the price of petrol has been made market determined, both at the refinery gate and at the retail level, with effect from 26th June, 2010.  The prices of diesel have been increased by Rs.2/- per litre and domestic LPG Rs. 35/- per cylinder and PDS Kerosene by Rs.3/- per litre.  It has also been decided that in case of high rise volatility in global oil prices, the government will suitably intervene in pricing of petrol and diesel.  As of now, the oil companies are free to take suitable decisions on pricing of petrol on the basis of international oil prices, market conditions and commercial considerations.

 

5.     I do hope that these steps would help to curtail the under recoveries incurred by the PSU oil companies in providing petroleum products at lower rates.  This in turn would reduce the burden of subsidies for the Government and facilitate utilization of scarce resources to priority areas.

 

Rajiv Gandhi Gramin LPG Vitrak Yojana

6.     As a step towards providing clean cooking fuel to the rural areas, the Rajiv Gandhi Gramin LPG Vitran Yojana was launched in March, 2010.  As per Vision - 2015, it is envisaged that the overall LPG population coverage would increase to 15 crores i.e. 75% of the total population from present 11.5 Crores i.e. 50% of total population.

 

NELP and CBM Policy

7.     India is now on the World oil and gas map. Under the eight rounds of New Exploration Licensing Policy (NELP), Production Sharing Contracts (PSCs) have been signed for 235 blocks.  As on 01.10.2010, total investment made on NELP by Indian & foreign companies is of the order of US$ 14.8 billion.  With the conclusion of the fourth round of CBM, Government has signed 33 contracts. Commercial production of CBM in India has now become a reality with current CBM gas production of about one lakh cubic metre per day.  The ninth round of NELP has been launched on 15th October, 2010 to offer bids for 34 oil & gas blocks covering an area of 88,807 sq. kms.

 

Acquisition Abroad

8.     During 2009-10, ONGC Videsh Ltd. (OVL) acquired 7 blocks abroad in 7 countries.  OVL produced about 8.87 Million Metric Tonnes (MMT) of oil and oil equivalent gas during the year 2009-10 from its assets abroad in Sudan, Vietnam, Venezuela, Russia,  Brazil, Syria and Colombia.   A Consortium of OVL, OIL & IOCL and others have acquired a 40% ownership interest in a subsidiary of Venezuela.  The upstream production facilities are expected to produce around 400,000 Barrels per day of extra heavy oil. This would further contribute to the energy security of the country.

 

Refinery

9.     During the year 2009-10, domestic refining capacity has been augmented to 185.40 million tonnes per annum as on 1st April, 2010. A major initiative has been taken by Public Sector Oil Marketing Companies (OMCs) to provide cleaner fuel in the country. The refineries have also been upgraded to provide Euro-IV fuel to 13 cities and Euro-III to rest of the country, except some difficult areas. The refinery capacity is expected to reach 240.96 MMTPA by the end of 2011-12.  Exports of POL is the single largest (17.6%) merchandise exports from India. The new refineries at Bhatinda, Paradip and Bina would further augment the domestic refinery capacity making India as major refinery hub is South Asia.

 

Pipeline Network – City Gas Distribution Network

10.   There has been substantial increase in the pipelines network in the country with 28 product pipelines with a length of 11037 km and capacity of 67.2 MMT.  There are also 17 crude pipelines of 7425 km. and additional LPG pipelines of over 2000 km.  With increased availability of gas in the country the network of city gas distribution has been enlarged to cover CNG in 19 cities supplying gas for domestic consumers, public transport and commercial/industrial entities. In Vision – 2015, it is envisaged to provide PNG to more than 200 Cities across the country. CNG has made positive impact on the air quality of two big Metros, Delhi and Mumbai by bringing down the level of pollution substantially thereby improving public health. It is our endeavour to provide the benefit of this clean fuel to the people of the country.

 

Disinvestment

11.   Our Ministry has taken several steps to strengthen Oil PSUs for enhancement of energy security.  Towards this end, disinvestment of 10% paid-up capital in Oil India Limited (OIL) was undertaken along with an IPO in 2009.  The FPO of EIL was opened for subscription on 27th July 2010 and was oversubscribed by 13 times.

 

Conclusion

12.   Our Ministry will continue to work towards evolving effective policy measures to provide energy security to its people.  In this regard, the media has a vital role in informing the public on the challenges faced by the oil and gas sector and measures taken by the Government to ensure growth and stability of the economy.

 

rm/jl/dk/kol/13:41 hrs.

 

--
Palash Biswas
Pl Read:
http://nandigramunited-banga.blogspot.com/