David James
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India approves stalled projects worth US$11 billion in oil, power
PROVIDING a major boost to the Indian government's reforms agenda, the state-constituted Cabinet Committee on Investment (CCI) has given the go-ahead to a slew of infrastructure projects in the power and the oil and gas sectors entailing investments to the tune of about US$11 billion.
In the oil and gas sector, the committee has cleared 25 exploration and production blocks out of the 31 blocks where work had been stalled on account of security restrictions imposed by the defence ministry, freeing up an estimated US$4.61 billion of investments.
The panel has also approved 13 power projects worth US$6 billion in transmission, hydro and thermal sectors that had hit a wall due to non-clearances from the environment ministry. The clearance will bolster the oil and gas sector, say experts.
Blocks that have been cleared include those awarded to Reliance Industries, Oil and Natural Gas Corp (ONGC), Cairn India and Australia's Santos.
"Due to clearances given at this meeting, investment already made to the extent of US$2.71 billion will be put to use and further investment to the extent of US$1.9 billion will be made in the exploration activities in the next three to five years," the government said in a statement.
It added that investments worth US$1.9 billion will be undertaken for exploration and production activities over the next five years. Clearance of these blocks will help upstream companies like ONGC and Reliance Industries to go ahead with their stalled exploration agendas.
For exploration and production (E&P) players who had already signed the production sharing contract (PSC), but have been waiting for government approval - majority of these players are in Bay of Bengal, a few also in the West Coast - this is a good development, energy expert Narendra Taneja told CNBC-TV18.
"With the approvals in place they would be able to go ahead with the preparations like hiring rigs and hiring equipment and giving contracts and sub-contracts," he added.
In the power sector, the CCI reviewed the status of 20 projects, which had been awaiting clearances, mostly from the environment ministry.
The cleared projects, say economists, will help the government resuscitate an ailing economy with current account deficit at a historic high of 6.7 per cent. With just a year to go for the general elections, the ongoing budget session of parliament is the last window of opportunity for the government to push its flagship programmes and reforms agenda.
Three bills - on food security, land acquisition and Lokpal (ombudsman) - are awaiting passage during the session. Finance Minister P Chidambaram has been negotiating with senior opposition leaders to push bills on foreign direct investment (FDI) in insurance, GST, pension and Direct Taxes Code.
The government's top priority is to get the finance bills passed since any failure to get the requisite majority on these bills might topple the current government.
The government has been pushed to a minority status in parliament after its ally Trinamool Congress withdrew support last year and the DMK followed suit last month.
Though the UPA is confident of completing its second term, a sudden crisis could spell its demise. Prime Minister Manmohan Singh held a three-hour long parley with President Pranab Mukherjee on the eve of the second phase of the budget session to discuss the situation.
India approves stalled projects worth US$11b in oil, power
PROVIDING a major boost to the Indian government's reforms agenda, the state-constituted Cabinet Committee on Investment (CCI) has given the go-ahead to a slew of infrastructure projects in the power and the oil and gas sectors entailing investments to the tune of about US$11 billion.
In the oil and gas sector, the committee has cleared 25 exploration and production blocks out of the 31 blocks where work had been stalled on account of security restrictions imposed by the defence ministry, freeing up an estimated US$4.61 billion of investments.
The panel has also approved 13 power projects worth US$6 billion in transmission, hydro and thermal sectors that had hit a wall due to non-clearances from the environment ministry. The clearance will bolster the oil and gas sector, say experts.
Blocks that have been cleared include those awarded to Reliance Industries, Oil and Natural Gas Corp (ONGC), Cairn India and Australia's Santos.
"Due to clearances given at this meeting, investment already made to the extent of US$2.71 billion will be put to use and further investment to the extent of US$1.9 billion will be made in the exploration activities in the next three to five years," the government said in a statement.
It added that investments worth US$1.9 billion will be undertaken for exploration and production activities over the next five years. Clearance of these blocks will help upstream companies like ONGC and Reliance Industries to go ahead with their stalled exploration agendas.
For exploration and production (E&P) players who had already signed the production sharing contract (PSC), but have been waiting for government approval - majority of these players are in Bay of Bengal, a few also in the West Coast - this is a good development, energy expert Narendra Taneja told CNBC-TV18.
"With the approvals in place they would be able to go ahead with the preparations like hiring rigs and hiring equipment and giving contracts and sub-contracts," he added.
In the power sector, the CCI reviewed the status of 20 projects, which had been awaiting clearances, mostly from the environment ministry.
The cleared projects, say economists, will help the government resuscitate an ailing economy with current account deficit at a historic high of 6.7 per cent. With just a year to go for the general elections, the ongoing budget session of parliament is the last window of opportunity for the government to push its flagship programmes and reforms agenda.
Three bills - on food security, land acquisition and Lokpal (ombudsman) - are awaiting passage during the session. Finance Minister P Chidambaram has been negotiating with senior opposition leaders to push bills on foreign direct investment (FDI) in insurance, GST, pension and Direct Taxes Code.
The government's top priority is to get the finance bills passed since any failure to get the requisite majority on these bills might topple the current government.
The government has been pushed to a minority status in parliament after its ally Trinamool Congress withdrew support last year and the DMK followed suit last month.
Though the UPA is confident of completing its second term, a sudden crisis could spell its demise. Prime Minister Manmohan Singh held a three-hour long parley with President Pranab Mukherjee on the eve of the second phase of the budget session to discuss the situation.
India approves stalled projects worth US$11b in oil, power
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