The Hindu : Andhra Pradesh / Hyderabad News : Moratorium: decision soon on oil firms’ plea

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Tuesday, Jan 15, 2008
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Andhra Pradesh

Andhra Pradesh - Hyderabad

Moratorium: decision soon on oil firms’ plea

All major players want a holiday
Moratorium due to shortage of rigs

HYDERABAD: The Central government will take a decision in a fortnight on the request of oil companies to give a holiday, probably for a couple of years, on exploration activities in view of the global shortage of rigs, according to M. S. Srinivasan, Secretary, Petroleum Ministry.

Talking to reporters on the sidelines of the seventh international conference and exposition on petroleum geophysics here on Monday, he said all major players wanted a holiday. The government was closely examining the issue.

Chairman and Managing Director of Oil and Natural Gas Corporation (ONGC) R.S. Sharma said the company had requested the government to give a two-year moratorium as drilling had to be completed in a minimum of four years. The extra two years were sought as rigs were not available. In fact ONGC would come out with a fresh tender with a stipulation that anybody who would bring a rig before June 2010 would get higher price as an incentive, he said.

Subsidy

The government had agreed ‘in principle’ to the request of the oil companies, including Reliance, and the approval of the Cabinet was awaited.

On the subsidy on petroleum products, he said it would be around Rs. 70,000 crore and ONGC would have to bear one-third of it.

Asked about the progress on Rs.26, 500-crore Kakinada Refinery, he said SBI Caps had been appointed for financial appraisal of the project and its report was expected in 10 days.

To a question on the likelihood of Hindujas participating in the project, he said informal discussions were held with them as they had evinced interest.

Regarding discoveries in the Krishna-Godavari basin, he stated that the ONGC had submitted proposals to Director-General Hydrocarbons for cluster development.

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