Restructuring Planned

The government is planning to restructure national oil companies to enhance their efficiency and competitiveness in the emerging post- administered pricing mechanism (APM) market situation.

The government is also promoting private investment in exploration and production of crude oil to supplement efforts of the national oil companies. Importance is also being attached to strategic alliances with other countries to take up exploration and production projects in India.

This is expected to increase the number of players in the exploration and production sector and inject greater capital and new geological concepts for discovering oil and gas in the country. These are parts of a multi-pronged strategy to help the country meet its oil requirements internally.

Efforts are on to operationalise the new exploration licensing policy (NELP) which offers an attractive package to the private and public sectors for expanding exploration activities in the country.

Exploration blocks are expected to be offered under NELP shortly.

The government is encouraging public sector oil companies to secure equity in foreign countries at competitive costs. Increasing globalisation of exploration and production and the opening up of the oil sector are expected to offer Indian oil companies opportunities to diversify.

As against the estimated consumption of petroleum products of about 83 million tonnes in 1997-98, the country's crude oil production was only about 34 million tonnes. The estimated crude oil import during 1997-98 was 34.49 million tonnes. Around 19.5 million tonnes of petroleum products were imported in the same year. The demand for petroleum products is expected to be 113 million tonnes by 2001-02 and about 155 million tonnes by 2006-07.