Falling oil prices short-term phenomenon: Oil secretary

December 22nd, 2008 - 3:05 pm ICT by IANS  

New Delhi, Dec 22 (IANS) Oil secretary R.S. Pandey Monday described the current drop in oil prices as a short-term phenomenon, and said prices would definitely rise.”All indicators are that the current fall in oil prices is going to be a short-term phenomenon,” Pandey said at the contract signing ceremony during the seventh round of auction of hydrocarbon assets in an attempt to assure operators that their investments would reap benefits.

“During my visit to the London conference, I did not meet a single person who said oil prices will continue to fall indefinitely,” Pandey said, referring to the ministerial meet on oil prices held in the British capital recently.

The petroleum secretary asserted oil prices would pick up once the global economic condition stabilised.

“The day the global recession ends and economic activity improves, oil prices will pick up again.”

Pandey urged operators to go forth with their investment plans as part of their responsibilities in the production-sharing contracts.

“When you sign a contract, you take on your responsibility and I hope that no company would seek for an extension of the contract,” he said.

The seventh round of the auctions, which started in December last year, attracted $1.5 billion in investment from oil companies. It offered 57 exploration blocks covering a sedimentary basins area of about 171,000 sq. km.

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