Thaindian News

Mumbai, Aug 20 (IANS) The Anil Dhirubhai Ambani group Thursday accused the petroleum ministry of failing to attract foreign investment in the auctions for oil and natural gas exploration blocks in the country because of its flip-flop, partisan and non-transparent policies.
The auctions under a new exploration policy conducted over the past three years unfortunately reveal the absolute failure of the oil ministry to attract any global capital inflow into the country’s upstream hydrocarbons sector, the group charged.

“This is primarily due to absence of a well-defined, transparent and consistent policy regime,” said J.P. Chalasani, chief executive of the group’s Reliance Power, reacting to an interview given by the Director General of Hydrocarbons V.K. Sibal.

“Not even one of the top five international oil companies participated in the rounds.”

The oil ministry regulator had said in the interview that the ongoing tussle over gas from the Krishna-Godavari basin between Anil Ambani-led Reliance Natural Resources and his elder brother Mukesh Ambani’s Reliance Industries will tarnish India’s image as an oil investment destination.

But the Anil Ambani group alluded that the dispute was mainly because of the lack of sanctity the oil ministry attached to concluded contracts. Reliance Industries had declined to supply gas to the Anil Ambani firm on the ground that the oil ministry had not approved the same.

Chalasani also said that rather than following the government’s stated objective of converting the Indian upstream sector into a competitive market, the oil ministry has turned it into a duopoly, with Reliance Industries and the state-run Oil and Natural Gas Corp as the main beneficiaries.

He said while the state-run company owns 57 percent of the oil assets, as much as 30 percent was with Reliance Industries. “The others — more than 50 players — have just 13 percent share of the acreage under the new auction rounds.”

Chalasani, during the course of the conference call with reporters, also went on to quote The Times of London as saying British Gas, Total and Royal Dutch Shell and Italy’s ENI had opted to stay away because of the fear of nationalisation of pricing mechanisms.

He said in the latest round of auctions for 57 blocks for which bids were invited, 20 percent, or 12 blocks, had no taker, 30 percent, or 19 blocks, attracted just one participant, and for 25 percent, or 16 blocks, the production sharing contracts are yet to be signed.

“The top private foreign players such as Exxon, Shell, Chevron, Statoil and Conoco Phillips have never participated in a single round of auction,” Chalasani said, adding what was appalling was that such lack of interest was exhibited despite crude oil prices touching record highs.