oil conundrum

The malaise in India's oil and gas sector goes much deeper than just the recent gas opera featuring RNRL, RIL and NTPC where Mukesh Ambani aided and abetted by the oil ministry is trying to ensure that might is right in order to prevent execution of concluded contracts on gas supply. As much as 87 per cent of India's oil and gas acreage is with a duopoly - ONGC and RIL. One understands ONGC for there is a legacy system involved. ONGC being India's premier exploration company till RIL decided to enter this sector and tried to turn it in to a monopoly from what was till recently a duopoly.

What is not so well known is that India's famous New Exploration Licensing Policy has been an abject failure over the last three years. None of the global big five - Exxon, Shell, Chevron, Statoil and Conoco Phillips - have ever participated in these bids. Instead ONGC holds 57 per cent of all acreage, RIL holds 30 per cent and others consisting of more than 50 bit players have just 13 per cent of the NELP acreage.

Failure or success is for one and all to judge. The idea of converting India's upstream sector into a multiplayer competitive market has failed miserably. This despite tens and thousands of dollars being spent by the oil ministry and DGH to conduct road shows in key energy capitals across the world - Moscow, London, Houston etc. Sadly nobody is willing to bite. So claims by Cairn and RIL of mega discoveries in both oil and gas have not impressed the big boys. So, where is the question of the gas row affecting sentiment and global investment flows into India's energy sector. This is another one those myths perpetrated by the oil ministry/DGH to keep the rest of the government happy.

During the seventh round of NELP, no bids were received for 12 (over 20 per cent) out of 57 blocks; only a single bidder participated for 19 (over 30 per cent) out of 57 blocks and production sharing contracts are yet to be signed for 16 (over 25 per cent) blocks. This is a serious reality check for the government to examine the mismanagment of the oil and gas sector in the country.

A case of fictionalising fact Mr Deora and Mr Sibal. Even as you tom tom successes notched by the oil and gas sector in India. Nobody other than RIL wants to touch India with a bargepole. And you want to keep it that way.