New Delhi: Petroleum minister M. Veerappa Moily said on Monday that he would try to attract investments in India’s hydrocarbon sector at a time of rapidly diminishing interest.

“It affects our economy in a big way. We have to create a level of confidence for investors. There is $50 billion worth of foreign investments awaiting," Moily told reporters after assuming office.

Moily replaced S. Jaipal Reddy as oil minister on Sunday; the latter was shifted to the ministry of science and technology amid allegations of slow decision-making, including delayed clearances sought by Reliance Industries Ltd for some of its wells in the KG-D6 deepwater field in the Bay of Bengal.

Moily dismissed questions about his predecessor being removed over differences with India’s most valuable company.

While India’s oil and gas sector has attracted interest from investors such as London-based BP Plc and Vedanta Resources Plc, there have been concerns about diminishing interest in the area, prompted largely by the policy regime.

“There will be quick decision-making," Moily said. “We can’t shrug or avoid taking decisions. Delaying decisions is no solution."

Shares of Reliance Industries rose 1.53% to 811.20 on BSE, while the benchmark Sensex rose 0.06% to 18,635.82 points.

Reliance Industries has been asking for the approval of budgets and work programmes for the KG-D6 field for 2010-11, 2011-12 and 2012-13.

The Mukesh Ambani-controlled firm and its British partner BP are also involved in a dispute with the government over the petroleum ministry’s proposal to deny the country’s biggest refiner $1.24 billion towards recovery of costs for developing gas fields in the KG basin for 2010-11 and 2011-12.

The ministry wants to restrict the recovery of costs incurred by Reliance Industries for the excess capacity created in the KG-DWN-98/3 field and limit any cost recovery to the extent of the infrastructure used. The company had claimed associated costs as deductions before estimating the profit to be shared with the government. Such front-loading of the costs means the revenue to be shared with the government drops correspondingly.

The Comptroller and Auditor General of India said in a report that the explorer had breached some terms of its contract with the government. The oil ministry then sought the views of the law ministry which, in turn, passed on the request to the government’s law officer Rohinton Nariman. This was after the firm failed to meet its own target for gas generation from the KG-D6 field. The issue is currently in arbitration.

Moily’s appointment comes before a panel headed by C. Rangarajan, chairman of the Prime Minister’s economic advisory council, presents its report on improving the existing mechanism. The panel is trying to resolve issues such as profit-sharing between the investor and the government and effective supervision of projects.

“The idea is to provide energy security to the people of India," Moily added.

India, the world’s fourth largest energy-consuming nation, imports 80% of its crude oil and 25% of its natural gas requirements. The country trails the US, China and Russia, accounting for 4.4% of global energy consumption. India’s energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) today, to around 1,500 mtoe, according to the oil ministry’s estimates.

Moily said he would work towards bridging the difference between the world’s per capita crude consumption and that of India by increasing India’s per capita consumption to six barrels a year.

“Average worldwide oil consumption is 14 barrels per person per year while that in developing countries it is three barrels per person per year. In India the picture is not so happy with a consumption of 1.2 barrels per person per year," he said.

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