Import lobbies derailing India's oil exploration: Minister (Roundup)

Petroleum Minister M. Veerappa Moily Friday claimed that India's energy exploration activities are being derailed by "threats" to ministers from the import lobbies, which want the country to remain dependent on oil and gas imports, and "bureaucratic obstructions".

"Every minister who is occupying this (petroleum) position is threatened. There is bureaucratic delay and obstructions and also other lobbies that don't want us to stop imports," Moily told media persons here.

However, "Moily cannot be threatened," said the minister.

He said the country is "floating on a sea of oil and gas and we're not exploring it" because of the "threats and obstructions".

Data show that after nine rounds of activity under the government's New Exploration Licensing Policy (NELP), about 80 percent area is yet to be explored extensively.

If the imports continued in the current manner, the country would be staring in the face of importing nearly 100 percent of its oil and gas requirements, said Moily.

"The decision making process is obstructed, aborted, while this work of the import lobbies will work out to the detriment of the country. All our earnings are going out (for oil imports). This cannot go on, it has to come to a stop," Moily said.

Pointing out that low investor sentiment in the last 4-5 years has been a dampener for increased exploration activity, Moily underlined the need for properly compensating producers.

"We have to give the right price (contractual)," the petroleum minister said.

He said that such high level of import dependence meant that the country was always challenged by the vagaries of international prices, compounded by factors like rupee depreciation against the dollar.

Moily said he has proposed to the Cabinet Committee on Economic Affairs (CCEA) to increase domestically produced gas prices from current $4.2 per million British thermal unit to $6.7 mbtu.

He has been under attack from CPI leader Gurudas Dasgupta for proposing to hike natural gas prices by 60 percent.

Reacting to the petroleum minister's comments, Dasgupta was quoted as saying: "He is a first class liar. Moily should go to court."

Earlier this week, Dasgupta told a leading daily that while the benefit of enhanced gas prices that accrue to the state-run companies ultimately flow back to the government in the form of increased share in the fuel subsidy sharing mechanism, dividends and profits, corporates themselves pocket the enhanced super profits.

The BJP Friday termed as "shocking disclosure" the remarks of petroleum minister, while the CPI-M demanded a reversal of government policies concerning oil supply.

The Congress said it was for Moily to explain his remarks.

Bharatiya Janata Party spokesperson Nirmala Sitharaman said the shocking disclosure by the oil minister vindicates her party's stance.

She said Moily was the fourth petroleum minister under the UPA government to hold the petroleum portfolio while the ministry had been handled by a single minister during the National Democratic Alliance government.

"They are changing ministers. Very clearly, there is no transparency in decision making. There is no policy. What Mr Moily had said vindicates what we have been saying," Sitharaman told IANS.

"Many skeletons have come out of cupboard of UPA," she added.

Communist Party of India-Marxist (CPI-M) leader Basudeb Acharia said the government should explain why it had not resisted pressure from oil lobbies.

He said Moliy's remark about oil lobbies was "a fact" and India's import of petroleum products has been steadily rising while share of domestic production going down.

"Why government cannot come out of pressure. Why government always surrenders before the oil lobby," he asked.

"The government's policy should be reversed," he said.

Congress spokesperson Shakeel Ahmed said it was for Moily to explain his remarks.

"Who is trying to influence his decision, it is for Mr Moily to explain," Ahmed said.