Subsidy on Fossil Fuels Well it’s a very heated topic about the subsidy given by the countries for the fossil fuel. The subsidy does nothing good but only adds to the concern of the economy by rising deficit. Taking in to consideration the global economy and the environment, one way of helping the environment remain […]
Fuel Price Hike The first expert committee for the de-regulation of diesel was set up by the government over 15 years ago. It is now after a decade and half that the government has taken the steps towards the deregulation of the fuel. It is quite understood that the government is bound to control the […]
Under pressure from the Government, telecom tower companies in India have banded together to float a contract to buy green power from privately owned green companies in India. Note these fierce competitors have formed a cartel to drive down the prices of buying renewable energy from small suppliers. Telecom towers manage to get subsidies of […]
The Indian Government has been enmeshed in a never ending series of scandals and scams. The government constantly fighting the endless attacks on it by the opposition and allies alike has been paralyzed letting the economy go to the dogs. The economic growth has almost halved due to this policy freeze as well as the […]
The Indian economy has performed strongly over the last few years, regularly hitting 8% and above growth rates . This rapid economic growth has led to a significant increase in demand for crude oil and natural gas, to the extent that India is currently the sixth largest consumer of oil and gas. India is one of the biggest importers of crude oil and natural gas as it has to import 2/3rd of its requirements of Oil. Upstream activity in India has rapidly grown post liberalization with 42 active offshore rigs and several seismic vessels engaged in operations offshore on the east and west coasts. Several significant discoveries have been announced since the New Exploration and Licensing Policy (NELP) was introduced. The commercial discovery of the Dhirubhai field by Reliance in the deepwater Krishna Godavari basin has demonstrated the existence of significant reserves in the basins of India. As India imports about two-thirds of its crude oil requirement, Exploration and production of oil and gas is critical for India’s energy security and economic growth. Over the years the E&P industry has registered significant growth, primarily due to spiraling crude oil and gas prices.
Natural gas is rightly termed as the Fuel of the 21st Century, has emerged as the most preferred fuel due to its efficiency and cost effectiveness. The demand of natural gas has sharply increased in the last two decades at the global level. The production of natural gas is around 87 million standard cubic meters per day. The main producers of natural gas are Oil & Natural Gas Corporation Ltd. (ONGC), Oil India Limited (OIL) and JVs of Tapti, Panna-Mukta and Ravva. Even private parties from some fields produce gas under Production Sharing Contracts. Government has also offered blocks under New Exploration Licensing Policy (NELP) to private and public sector companies with the right to market gas at market determined prices. In India most of the production of gas comes from the Western offshore area. The on-shore fields in Assam, Andhra Pradesh and Gujarat States are other major producers of gas. Smaller quantities of gas are also produced in Tripura, Tamil Nadu and Rajasthan States. OIL operates in Assam and Rajasthan States, whereas ONGC is operating in the Western offshore fields and in other states. Prior to 1987, gas prices were fixed by ONGC/OIL. since 1987, the price is being fixed by Government. The Ministry of Petroleum & Natural Gas has been regulating the allocation and pricing of gas produced by ONGC and OIL by issuing administrative orders from time to time. The gas produced by the JVs and by NELP operators is governed by the respective production sharing contracts between the Government and the producers. Under the existing policy, 100% Foreign Direct Investment (FDI) is allowed for both LNG projects and natural gas pipeline projects.