BJP working on rejig plan for gas pricing, exploration policy
Sanjay Dutta,TNN | Apr 24, 2014, 12.37 AM IST
NEW DELHI: Away from the heat and dust of electioneering, the BJP's Energy Cell has settled down to unclutter policy for oil hunters, confident that the party will form the next government at the Centre.
The initial contours of the cell's manual for a BJP-led government's oil minister indicate pressing the pause button on the 10th round of exploration block auctions, cleaning up grey areas in policy and contracts with a simple, transparent and well-regulated cost-recovery model and reworking gas pricing.
The thinking, sources said, is to fix gas pricing issue and resolve disputes with explorers quickly so that decision-making does not become hostage to controversy like it has happened in the wake of Reliance Industries Ltd's continued skirmish with the oil ministry under S Jaipal Reddy and M Veerappa Moily.
The cell is also toying with the idea of different pricing regimes for various types of blocks — onland, shallow water and deep water. The gas pricing formula is to be tweaked for a price that would satisfy the power and fertilizer units without eliciting allegations of extending windfall benefit to producers.
Undoubtedly, these ideas would be debated and examined in the government and industry in detail before being accepted as policy - if the BJP forms the government. Narendra Taneja, the cell's national convenor, declined to comment on its working except saying India's E&P sector was in a "big mess".
"There is lack of transparency. Companies are sick of hurdles and delays over decisions. Some big names are packing their bags. Even in the blocks that were bid out, there is no activity in the deepwater blocks. What is the point of launching another round of auction? The need is to fix the existing ones before offering new ones," Taneja said.
"Let us not forget that more than 55% of India's sedimentary areas is in deep water. That is where we must concentrate. The new government must first facilitate action on all the allotted deepwater blocks. If that means postponing the NELP-X by a few months, so be it," Taneja added.
Oil minister M Veerappa Moily on January 12 launched the primer for 10th round of block auctions by showcasing 46 concessions. This was done in spite of an air of uncertainty created by contradictory recommendations from two panels under C Rangarajan and Vijay Kelkar.
Rangarajan recommended switching from the present production-sharing regime to royalty-sharing model that is seen leaving little room for dispute or controversy over recovery of costs by operators like in the case of RIL's KG-D6 block. Kelkar endorsed the present regime, reflecting the opinion that royalty-sharing is not an attractive model for a low-prospectivity country like India.
Gas pricing and the ministry's dispute with Reliance has hogged the election campaign. Arvind Kejriwal's Aam Aadmi Party and Left leader Gurudas Dasgupta have been going to town against the government'' move to double gas prices from April in line with a pricing regime suggested by the Rangarajan panel.
BJP working on rejig plan for gas pricing, exploration policy - The Times of India
It's good that BJP have already started finding solutions for mess created by UPA in previous 10yrs. Hope they continue to do so and be quick on other issues after coming to power as well
