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Petroleum Ministry plans to bring in policies to enhance foreign investments in oil, gas sector

18 Jun 2014 Evaluate

Amid concerns over declining foreign investments in India's oil and gas sector, Petroleum Ministry has planned to bring in policies that would ease the way for large foreign investments in the oil and gas sector. Assuring an overhaul to make policies predictable, transparent and fair to investors, Petroleum Minister Dharmendra Pradhan has stated that there is an urgent need to facilitate an increase in domestic oil and gas production and Ministry is in the process of ushering in a new exploration and production policy after amending the existing New Exploration Licencing Policy (NELP).

Petroleum Ministry proposes to replace NELP with a uniform licensing policy to facilitate production of all forms of hydrocarbons from oil to shale gas under a single policy regime. The Ministry also cleared that the next round of oil and gas block auctions will be offered with all statutory clearances that will derisk exploration activities to some extent. Under the 10th round of NELP, more than 1,48,000 square kilometres of exploration acreage has been identified for auction.

Globally, India ranks fourth in energy consumption and consumes about 4.5 percent of the world's primary energy in a year. Presently, India imports around 25 percent of total India’s natural gas demand and 80 percent of crude oil demand. India’s oil and gas demand has been increasing at a rapid pace and it has become imperative for government to take steps to enhance domestic energy production to meet the growing demand. However, Indian domestic natural gas production fell by 16.3 percent to 33.7 billion cubic meters from 40.3 bcm in 2013. India's oil production was remained unchanged at 894,000 barrels per day (42 million tonnes) in the previous year.

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