Oil India hints at investment in HPCL project

Oil India hints at investment in HPCL project

Mumbai: Oil India is likely to invest in Hindustan Petroleum’s (HPCL) refinery expansion project, Oil India chairman N M Borah said here on Thursday.

“Our core competence lies in the upstream sector, but we would also like to have some presence in the exploration and production value chain as well. We think HPCL will be a good partner," he said with reference to the MoU signed with HPCL last month.

Borah was addressing the media on the sidelines of an international oil and gas meet here.

On 12 August, both OIL and HPCL had inked an MoU to explore possibilities in E&P activities for hydrocarbons, city gas distribution, pipeline projects, greenfield refineries, R&D and any other area of common interest.

HPCL operates two refineries a 6.5-mt in Mumbai and a 7.5-mt in Vishakapatnam.

Meanwhile, director general of the directorate general of hydrocarbons (DGH) S K Srivastava parried all the questions from the media on the recent comptroller general of India (CAG) report on Reliance Industries’ KG-basin gas fields.

The only thing he proffered repeatedly was: “I have not studied the CAG report."

Addressing the oil summit, Srivastava spoke about a new open licensing policy which his ministry is working on, besides the proposed national petroleum data repository which would have all industry related data under a single roof and also supply it to universities and oil companies.

“Out of the 80 companies working in the petroleum sector in the country, BHP Billiton, British Petroleum, British Gas, Cairn are present in the country. There is much more potential in sedimentary deposits.

The government is also putting in policies to explore coal-bed methane and gas hydrates, as well as shale gas. The country has huge shale gas potential in the Cambay Bay, Gondwana, Kaveri and Krishna basins,“ he said.

Former DGH and CMD of Petrobiz Consultants Avinash Chandra urged the government to tap vast shale gas potential, saying “the first step should be to involve all stakeholders in a formal consultation process and not merely the oil firms. This ought to include all major oil and gas companies, gas consumers and infrastructure developers," he said.

Chandra also said the government facilitate a simultaneous gas pipeline infrastructure development by encouraging companies with strong project execution skills and track record in parallel with shale gas exploration.

“The government must adopt a new approach for a very quick development and consumption of shale gas by involving large consumers and producers in consortium, to bid and develop shale gas blocks," he said.

He also called up on the government to let shale gas producers sell their produce at market prices without any price caps, besides allowing biding by current license holders, open up new blocks for exploration as well as put in place a tax holiday and loyalty regime.

“The government must adopt a tax and royalty regime for blocks as done for coal bed methane, and not the production sharing regime as in the Nelp blocks," he said.