The Telegraph
Since 1st March, 1999
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Fast forward on petro revamp
- Several options on the table

New Delhi, Jan. 16: Prime Minister Manmohan Singh said the government was exploring possibilities of restructuring the public sector oil companies to make them globally competitive.

The government is keen on achieving energy security by intensifying domestic exploration efforts and accessing overseas opportunities, he said while inaugurating Petrotech-2005 here today.

The Prime Minister's office has already given its nod for the petroleum ministry's committee on 'synergy in energy', which will hold its first meeting on January 24. The committee will be headed by V. Krishnamurthy, a member of the Prime Minister's advisory council. Its members will include former Oil and Natural Gas Corporation (ONGC) chief B. C. Bohra and ex-BPCL chairman U. Sundarajan.

The government has in mind six options for the sector. One is to create two mega players by merging Indian Oil with Oil India and Bharat Petroleum and Hindustan Petroleum with ONGC. Another is to follow the existing arrangement and ask the companies to sharpen focus on core competence.

Singh said, 'We can no longer be complacent and must learn to think strategically, think ahead and act swiftly and decisively.'

He pointed out that China was ahead of India in planning for energy security.

'The challenge before us as a nation is to meet the energy needs of all segments of the population efficiently and affordably while ensuring long-term sustainability and environmental protection,' he added.

Cautioning that India was not blessed with abundant fossil fuel resources, the Prime Minister said, 'To make our growth model more sustainable, we must step up efficiency of energy consumption so that we can moderate the impact of growth on the demand for energy.'

Singh said it was important to have an accurate demand projection of the energy mix of the country in the years to come, besides putting in place a rational energy pricing mechanism.

The Prime Minister said to meet the burgeoning demand for petroleum and gas, the government had opened the exploration and production sector for private participation.

He said the fifth round of bidding was launched on January 4 this year, offering 20 blocks for exploration of oil and natural gas.

Rational pricing of energy was a critical aspect of an energy policy and a vital element of energy security for the country, he added.

'The introduction of pricing in the demand model is important as it is the critical factor that will help in not only ascertaining the correct pattern of energy mix but also enabling a better demand forecast for each energy type,' Singh said.

'I am told that with better energy conservation and more efficient use, we could save up to 10 million tonnes of oil per year, which is significant,' he said, adding that according to some studies, the cost of environmental damage, when assessed in terms of potential GDP, comes to about 10 per cent of GDP.

'This is alarming and needs concerted efforts for controlling it,' he said.

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