As the market is gradually moving towards consumer-centric environment in oil and gas sector, India is likely to join Asian nations in procuring liquefied natural gas (lNG) soon, a move aimed at securing more flexible supply contracts. At the same time, the Petroleum Ministry is also pitching all public sector oil majors to come up with proposals for the companies they want to acquire or be merged with so as to become integrated oil company.
“As the market was gradually becoming more consumer-centric, India does not rule out the possibility of joining China, Japan and Korea to jointly buy lNG as part of efforts to extract better deals,” Oil Minister Dharmendra Pradhan said on Friday, while launching the dedicated grievances redress platform on social media for all queries and grievances relating to oil & gas sector.
In a move that shifts power to importers from producers as oversupply grows, all the world’s biggest lNG buyers, especially all from Asian countries, are clubbing together to secure more flexible supply contracts.
As far as integrated oil behemoth is concerned, the Petroleum Ministry has also asked all PSU oil firms to come up with proposals to become integrated largest oil company in the world. However, experts in the sector are of view that the proposed oil behemoth will not just compete globally, but withstand oil price volatility by using profits the refining business make in low oil prices to make up for losses in upstream and vice versa.
“We have asked the companies to appoint consultants, assess the advantages and disadvantages. let them come with concrete proposal to the Ministry. I think things are on the right track. We are evaluating what will be the roadmap. Nothing is in front of me and it is up to them. I am the policy custodian, I’m not the businessman,” Pradhan said, adding that the Department of Investment and Public Asset Management and the Petroleum Ministry together are closely monitoring the integration plans.
Finance Minister Arun Jaitley had announced this consolidation move of all oil companies in his Budget this year of creating an integrated largest oil firm and the Oil Ministry also had asked companies in its purview to present integration plans.
There are six major State-owned oil & gas PSUs - ONGC and Oil India ltd being the oil producers; Indian Oil Corp (IOC), HPCl and Bharat Petroleum Corp ltd (BPCl) in the refinery business and GAIl in midstream gas transportation. The rest, such as ONGC Videsh, Chennai Petroleum Corp (CPCl), Numaligarh Refinery ltd and Mangalore Refinery (MRPl) are subsidiaries of one of or the other PSU. It is expected that there could be some possibility of merger of refiners HPCl and BPCl with ONGC and merger of IOC and OIl. This would create two large vertically integrated oil companies.
Meanwhile, the Oil Ministry of Petroleum and Natural Gas has launched a dedicated grievances redress platform, called MOPNG e-Seva portal, in the social media for all queries and grievances related to oil and gas sector. “The portal will be largely targeted towards addressing grievances of consumers of oil marketing companies and city gas distribution companies. The sector caters to nearly 3.5 crore consumers every day in the piped natural gas, city gas distribution, petrol, diesel and kerosene verticals. The grievance redress mechanism will aim at addressing complaints within 48 hours,” said Pradhan.