Uncertainty over natural gas prices, fatte of RIL discoveries among key issues officials will highli.

NEW DELHI: the Uncertainty over natural gas prices, fate of Reliance Industries' discoveries worth $7 billion and the $9-billion Ratna and R-series oilfields that have not produced a drop of oil in 17 years, cooking gas subsidy and diesel prices are among the key issues that officials will highlight to the new oil minister, government sources said.

In addition to the presentations that will be made to the new minister, officials have also prepared a note for the Cabinet secretary, who is scheduled to meet petroleum ministry officials on Wednesday. The exercise aims to explain the ground reality and policies needed to boost energy security, reduce oil import bill and encourage investments in the sector, officials said.

Some of the proposals that were approved by former oil minister Veerappa Moily, but could not be implemented because of various reasons, will also be reviewed by the incoming oil minister before the Cabinet considers them, officials said. Various arms of the ministry, such as exploration, refinery, gas and marketing divisions have already prepared detailed presentations on issues related to their domain, officials said. Officials say that most of the issues are related to exploration of oil and gas such as allowing continuous mining in exploration areas and extension of production sharing contracts of Cairn India, officials said.

"Announcement of the new gas price is also a priority because RIL has slapped an arbitration notice on the government for delaying the decision. Cabinet has to resolve certain crucial issues pertaining to gas pricing that include doubts over its calculation and its applicability with retrospective effect," another official in the ministry said. Another issue is the award of Ratna oilfields to an Essar-led consortium. The dispute over the field has lingered for 17 years. "It is a criminal waste of time for a country, which imports about 80% of its crude oil requirements," an official said.

Officials said the new minister also needs to take a decision on half-a dozen discoveries of Reliance in three blocks including the KG-D6, where timelines have lapsed but the company blames the government for the delay. It will also take a call on the new exploration licensing policy (Nelp). The ministry has not been able to launch the new round of the policy for more than two years. The ministry also has to resolve crucial issues related to raising diesel cooking gas rates where revenue losses are estimated at over Rs 111,000 crore for the current financial year. Other matters on the scanner of the new minister would be setting up a gas grid in the country, sale of bio-fuel and strategic crude oil storage. Fate of Nat

Source : economictimes.indiatimes.com