Former Petroleum Minister and senior BJP leader Ram Naik has accused the UPA government of playing with the nation's energy security.
NEW DELHI: Former Petroleum Minister and senior BJP leader Ram Naik has accused the UPA government of playing with the nation's energy security by trying to renege on commitments given to investors, saying this will discourage companies engaged in finding oil and gas reserves.
Sovereign commitment in New Exploration Licensing Policy (NELP) of giving freedom to sell oil and gas at market prices had attracted foreign and private companies like Reliance Industries to invest in the dormant oil and gas hunt in the country, Naik told a news conference here.
"NELP made the world look at India and new investments saw the largest gas discovery being made (in Krishna Godavari basin by Reliance Industries in 2002). India is short of both oil and gas and needs such investments. Attempts to renege on promises in NELP will definitely not go down well with the investing community," he said.
RIL, which has discovered around 50 trillion cubic feet of gas reserves in KG-D6 block, proposed to price the gas at 4.33 dollars per million British thermal unit, lower than market price ranging from 4.75 to 5.70 dollars per mBtu. But this has been opposed by power and fertilizer sectors who want government to regulate prices. To resolve the issue, the government has set up an Empowered Group of Ministers.
"The nation's energy security is at stake," Naik said adding it would not be appropriate for the government to decide gas pricing.
A host of foreign firms including top rank BP Plc and BG Group have warned government of investor backlash if commitments in NELP were reneged.
"Government has been postponing new NELP bidding round for the fear of investor backlash," Naik said.
The seventh round of NELP was to come in April but has been put off to the year-end.
Naik, who besides bringing NELP in 1999 took steps like acquisition of oil and gas fields abroad and cutting import dependence by doping ethanol in petrol, said the UPA government lacked vision and political will to take decisions.
"All that the Petroleum Ministry has done is remove heads of state-run firms ONGC and GAIL. A bill to set up an oil regulator was introduced in Parliament during our time and it took them three years to set up the board," he said.
The former minister said no major acquisition, like the Sakhalin-I oil and gas field in Russia or oil field in Sudan done during his time, have taken place during past three years. "The oil companies are bleeding as the government is clueless on the pricing policy."
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