The prime minister’s principal secretary Nripendra Misra, cabinet secretary Ajit Seth, finance secretary Rajiv Mehrishi, chief economic adviser Arvind Subramanian, NITI Aayog member Bibek Debroy and officials from the petroleum and coal ministries represented the government at the nearly two-hour meeting last week. Top industry executives including PMS Prasad from Reliance Industries, Sashi Mukundan from BP Plc, Vedanta chief Tom Albanese, Cairn India head Mayank Ashar, ONGC chairman DK Sarraf and GAIL India chairman BC Tripathi made presentations before the officials. BP, which has invested $7 billion in India, and its partner Reliance had several disputes with the government over the sharp decline in gas output from their fields fell.
Cairn India is worried about the terms on which it may get an extension for the Rajasthan block, which has India’s biggest onshore oilfield.
The meeting was held at a time when the ruling party was aggressively busy responding to the opposition allegation that the government was favouring big business houses and ignoring the issues of farmers. Company executives presented their respective firms’ output targets, plans for capital spending and phys cal activities for the next five years and outlined the government support needed or this. “The officials heard us patiently.Very few questions were raised. I think his is just the beginning of a process,“ a op executive of an energy company said.“The larger message is that the government is serious about resolving the issues in the sector. The very fact that the Prime Minister’s Office is driving this and hasn’t left it to the oil ministry means something big is in the offing.“
“Another message, which is very clear, is that the government wants to create a level playing field for all participants. The old style of doing business when governments would tweak policies to benefit specific companies is over,“ he said. Just a month ago at an event, Prime Minister Narendra Modi laid an ambi ious road map for the oil and gas indus ry to cut import dependence by 10% in seven years from 78% now. During the meeting, Reliance Industries raised the issue of gas price and arbitration. The company raised its demand for a higher gas price, arguing the current price wasn’t remunerative enough.
Another message that emerged from the meeting is that the government was encouraging a wider consultative process. The top executives of each company have been asked to prepare a note on specific topics concerning the sector and submit to the government by mid-May, the executive said, adding that these papers will become the basis for discussion in the next meeting likely in another three weeks.
State-run Oil and Natural Gas Corporation (ONGC) is expected to prepare a note on India’s geological situation and its impact on the exploration and production activity, while BP has been asked to examine the financial aspects of the sector, the executive said. Cairn India is to prepare a paper on the regulatory hurdles holding back exploration and production, while GAIL India and GSPC will ready an analysis on the gas and pipeline segment. The brief is to do an industry analysis and not to prepare a companyspecific paper.