PM Modi to skip oil CEO meet over scheduling issues

Prime Minister Narendra Modi is believed to have canceled a brainstorming meeting with global oil and gas experts and CEOs, which was slated for October 14, over scheduling issues, sources said. The fourth annual meeting that coincides with the CERAWeek - the world's premier energy event - was scheduled for Monday afternoon but was canceled due to the Prime Minister's engagements, they said.

The meets, held under the aegis of Niti Aayog, have been a sounding board for the government to reorient policies to attract the elusive investment in finding new oil and gas reserves and bringing them to production to cut India's oil import dependence. French energy giant Total SA's Chairman and CEO Patrick Pouyanne and UK's BP plc Group Chief Executive Bob Dudley were among the leaders who were scheduled to attend the meeting with the Prime Minister on October 14.

The meeting and other such feedback mechanisms had led to the government doing course corrections on some of its policies, particularly the exploration licensing policy and natural gas pricing rules. The government had, going against the industry advise, brought in a revenue-sharing model for allotting oil and gas acreage. Under the 2016 policy, bidders offering the highest share of oil and gas to the government were allotted the blocks but the regime failed to attract big names to the exploration scene as companies preferred risks to be covered.

Two years later, the government reversed it and went back to allocating blocks to companies that offered the largest exploration program with a guarantee of first recovering all such costs from oil and gas found. Similarly, the 2014 policy of pricing natural gas at rates prevalent in gas exporting countries failed to enthuse any new investments, prompting it to bring in a new rate for fields in difficult areas such as the deep sea.

At the last edition of the brainstorming on October 15, 2018, "subjects such as expansion of oil and gas infrastructure in India; enhancing exploration and production; potential in solar energy and biofuels; and the Union Government's holistic approach to the energy sector came up for discussion," according to an official statement issued on that day. Modi's first meeting was on January 5, 2016, where suggestions for reforming natural gas prices were made. More than a year later, the government allowed higher natural gas prices for the yet-to-be-produced fields in difficult areas like deep sea.

In the second edition in October 2017, suggestions were made for giving out equity to foreign and private companies in producing oil and gas fields of state-owned ONGC and OIL. Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) this year offered dozens of small discovered field for bidding by foreign and private firms.

The meeting, coordinated by the Niti Aayog, focuses on challenges posed by volatile oil prices, impacted by changing the geopolitical situation. The meetings look at measures to attract investments and steps for making it easier to do business in India.

The government is looking at private investment to raise domestic oil and gas production, which has stagnated for the last few years while fuel demand has been rising by 5-6 percent annually. India is dependent on imports to meet 83 percent of its demand, and more than half of its natural gas requirements. The Prime Minister in 2015 had set a target of reducing India's oil dependence by 10 percent to 67 percent (based on import dependence of 77 percent in 2014-15) by 2022. Import dependence has only increased since then and the government is now looking for ways to raise domestic output.

Organization of the Petroleum Exporting Countries (Opec) Secretary-General Mohammed Barkindo and India's Oil Minister Dharmendra Pradhan were also scheduled to attend the Monday meeting, they said. Also slated to attend the meeting were ONGC Chairman and Managing Director Shashi Shanker, Indian Oil Corporation (IOC) Chairman Sanjiv Singh, GAIL India head Ashutosh Karnatak, Hindustan Petroleum Corp Ltd (HPCL) Chairman Mukesh Kumar Suran, and Bharat Petroleum Corp Ltd (BPCL) Chairman D Rajkumar.