Tuesday, September 15, 2009

Petroleum Ministry exceeds 100 day agenda targets

The Ministry of Petroleum & Natural Gas had identified following priority areas for the first 100 days of the new Government.

1. Pace of Oil and Gas exploration and production will be intensified
2. New Scheme of Rural LPG Distributor (Gramin LPG Vitarak)
3. Introduction of Smart Card for the beneficiaries of PDS Kerosene and Domestic LPG to check the leakage in their distribution
4. Pricing of Petroleum Products
5. Road map for extending city gas services
6. Acquisition of oil and gas assets abroad



The above set targets in the priority areas have been achieved in the 100 days. The details are as follows:

1. Pace of Oil and Gas exploration and production intensified:

The production of crude oil from Mangala Oil Field in Barmer, Rajasthan has commenced on 29.8.2009. The peak production will contribute about 25% of the total crude oil production in the country. It will also reduce crude oil import bill of India by about 8%.

The Eighth bid round of New Exploration Licensing Policy (NELP-VIII) offering 70 blocks covering an area of about 1.64 lakh sq. km. & the Fourth bid round of Coal Bed Methane (CBM-IV) offering 10 blocks covering an area of about 5000 sq. km. were launched on 9.4.2009 and the bid closing date is 12.10.2009. The promotional road shows to attract investment in E& P Sector under NELP-VIII and CBM-IV were held at Mumbai on 8.8.2009 (participated by more than 500 delegates), Houston on 20-21 August 2009 and Calgary on 24-25 August 2009. The response of investors was overwhelming in these road shows as participation exceeded the response in earlier rounds. Further road shows have been planned at London on 8-9 September 2009, Perth on 22.9.2009 and Brisbane on 24-25 September 2009. Government of India has assured 7 year tax holiday for commercial production of oil & gas and CBM under NELP-VIII & CBM-IV.

Petronet LNG Limited (PLL) has finalized gas sales agreement from Kochi’s LNG terminal for supply of about 1.25 MMTPA LNG from Gorgon, Australia.

2. New Scheme of Rural LPG Distributor (Gramin LPG Vitarak) :

In order to increase rural penetration and to cover remote as well as low potential areas for all the locations having potential of 600 and/or less refill sales per month, a new scheme namely, ‘Rajiv Gandhi Gramin LPG Vitarak Yojana (RGGLV)’ for small size LPG distribution agencies has been approved by the Government on 6th August 2009.

3. Introduction of Smart Card for the beneficiaries of PDS Kerosene and Domestic LPG to check the leakage in their distribution

Government has given approval for launch of pilot projects in Pune, Hyderabad and Bangalore to introduce Smart Card for the beneficiaries of domestic LPG and PDS Kerosene to check the leakage in the distribution of domestic LPG and PDS Kerosene. Oil Marketing Companies (OMCs) have begun preparatory action in this regard.

4. Pricing of Petroleum Products

An Expert Group to advise on viable and sustainable system of pricing of petroleum products has been constituted to examine the current pricing policy of the four sensitive petroleum products namely, Petrol, Diesel, PDS Kerosene and Domestic LPG and to make recommendations for a viable and sustainable pricing policy for these products. Dr. Kirit S. Parikh, Former Member, Planning Commission is the Chairman of the Expert Group. The Terms of Reference of the Expert Group are as follows:

To examine the current pricing policy of the four sensitive petroleum products namely, Petrol, Diesel, PDS Kerosene and Domestic LPG and to make recommendations for a viable and sustainable pricing policy for these products. This may, inter-alia include:

a) Examination of the current taxation structure on the sensitive petroleum products, with particular reference to Petrol and Diesel and make recommendations to rationalize the taxes levied by the Central and State Governments.

b) Examination of the financial health of the Public Sector Oil Marketing Companies and to recommend ways of compensating them for their under-recoveries in case they are not permitted to charge market prices as a result of Government’s intervention, in order to protect consumers.

c) Any other matter, which the Expert Group may consider necessary.

5. Road map for extending city gas services

A road map has been prepared by a Committee Chaired by Shri M.B.Lal, Member, Appellate Authority on Power & Petroleum for expanding the city gas distribution. The Committee has identified 202 cities/towns to be covered by 2015 in phases and the steps necessary for the same have been laid out.

6. Acquisition of oil and gas assets abroad

Cabinet Committee on Economic Affairs has approved OVL’s investment in Satpayev Block in Kazakhstan. The total investment in this project is likely to be US$ 400 million in the exploration phase.

7. In addition :

i. In line with Vision – 2015 which was finalized in Goa in June, 2009, for easy and efficient way of booking refills, Oil Marketing Companies (OMCs) have launched SMS/IVRS facility in Delhi on 31.8.2009. SMS/IVRS booking would have return SMS acknowledging the booking and confirmation on delivery. This facility would cover all the towns having a population of 5 lakh and above in the entire country in a phased manner by 2015.

ii. In order to have a simple, unique and rememberable helpline for all customers across the country to air their complaints relating to marketing of petroleum products, the OMCs have launched on 31.8.2009 a common short code six digit Toll Free Number 155233 for registration of suggestions and complaints.

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