Public sector explorers such as ONGC and Oil India are unable to drill nearly 70 million tonnes of crude oil, as heavy subsidy burden prevents them from investing in discoveries.
“They need more money to monetise some of the discoveries. There are certain discoveries viable at at least $65/barrel. If they get only $40-42/barrel, they cannot develop them,’’ Petroleum Secretary Vivek Rae told mediapersons on the sidelines of a CII Business Partners conference.
These discoveries are in Bombay High and KG basin in the East Coast. Nearly 70 million tonnes of crude oil resources are trapped in these acreages.
According to Rae, it makes sense to invest $65/barrel and get that oil out, rather than spending $105/barrel to import.
“There is need to review the burden sharing formula,’’ he added.
Public sector explorers such as ONGC and Oil India subsidise oil marketing companies (IOC, HPCL, BPCL) for selling diesel, PDS kerosene and domestic cooking gas below market cost.
siddhartha.s@thehindu.co.in