Top government officials meet to resolve complex issues May 4, 2015: The government and the oil and gas industry have come together in a major initiative led by the Prime Minister's Office to create an investment friendly climate and a level playing field in the exploration sector that is mired in disputes and stagnating output.
Officials from the Prime Minister's Office (PMO) and several ministries discussed various issues with company executives last week, industry sources said. Executives said something big may be in the offing, and that the broad message from the government was that it wanted to resolve all issues for oil and gas firms in a transparent manner and address broad industry issues, rather than changing policies to suit a particular company.
The prime minister's principal secretary Nripendra Misra, cabinet secretary Ajit Seth, finance secretary Rajiv Mehrishi, chief economic adviser Arvind Subramanian, NITI Aayog member Bibek Debroy and officials from the petroleum and coal ministries represented the government at the nearly two-hour meeting last week. Top industry executives including PMS Prasad from Reliance Industries, Sashi Mukundan from BP Plc, Vedanta chief Tom Albanese, Cairn India head Mayank Ashar, ONGC chairman DK Sarraf and GAIL India chairman BC Tripathi made presentations before the officials. BP, which has invested $7 billion in India, and its partner Reliance had several disputes with the government over the sharp decline in gas output from their fields fell.
The meeting was held at a time when the ruling party was aggressively busy responding to the opposition allegation that the government was favouring big business houses and ignoring the issues of farmers. Company executives presented their respective firms' output targets, plans for capital spending and physical activities for the next five years and outlined the government support needed for this. "The officials heard us patiently. Very few questions were raised. I think this is just the beginning of a process," a top executive of an energy company said. "The larger message is that the government is serious about resolving the issues in the sector. The very fact that the Prime Minister's Office is driving this and hasn't left it to the oil ministry means something big is in the offing."
"Another message, which is very clear, is that the government wants to create a level playing field for all participants.
The old style of doing business when governments would tweak policies to benefit specific companies is over," he said. Just a month ago at an event, Prime Minister Narendra Modi laid an ambitious road map for the oil and gas industry to cut import dependence by 10% in seven years from 78% now. During the meeting, Reliance Industries raised the issue of gas price and arbitration. The company raised its demand for a higher gas price, arguing the current price wasn't remunerative enough.