A ceiling price for natural gas from deepwater, ultra-deepwater and high temperature high pressure fields is required as the fuel is still a scattered commodity in terms of pricing globally, Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum and Natural Gas said.
Defending the government’s decision to put a ceiling on gas price while allowing pricing freedom to the contractors, Pradhan said, “Crude oil is a settled commodity globally. There are three or four recognised prices for crude oil globally. Gas is still a scattered commodity. It still has a local price. Therefore, keeping in mind the consumers, we have kept a ceiling price.”
Global markets “By the time blocks are bid out and discoveries are made under the Hydrocarbon Exploration Licensing Policy (HELP), we expect the gas markets globally to be more evolved and hence there is no price ceiling under HELP,” the Minister added.
Stating that a mechanism is being worked out to allow the existing coal bed methane block contractors to explore other hydrocarbons as well, Pradhan said, “We are aware there are companies such Essar Oil who have a Coal Bed Methane block, but also want to exploit shale gas from the same area. We have allowed Coal India to exploit different hydrocarbons from a single coal block. However, for the private sector it is more complex since there is already a fiscal model and adding another hydrocarbon resource is not so simple. We are exploring what are the possibilities to monetise the hydrocarbon that remains locked in such blocks.”