- The decision to almost double the natural gas price from April, 2013 would encourage investments in exploration and production (since a lot of money on technology and research to access the hydrocarbon) and in turn reduce the country’s dependence on imports.
According to the Petroleum Minister:
- The higher gas price would help in increasing the production over 3 trillion cubic feet (tcf) of gas reserves, which had been declared economically unviable at the current price of $4.2 per mBtu.
- Several gas discoveries of firms such as Oil and Natural Gas Corporation (ONGC) and RIL had been declared unviable by the Directorate General of Hydrocarbons (DGH) as the current gas price of $4.2 per mBtu was inadequate to cover the cost of production. “The option before the country is to either keep the gas finds under wraps and continue importing gas at $12-13 or pay much lesser than this price to domestic producers to bring the discoveries to production and cut foreign exchange outgo on imports. India might also end up importing 100 % if exploration is not encouraged.
- The new price from April, 2013 would apply to all public and private producers of conventional gas and non-conventional fuel like coal-bed methane and shale gas.
No comments:
Post a Comment