India does not offer a stable policy regime for oil exploration companies, said P.M. S. Prasad, Executive Director and Member on Board of Reliance Industries Ltd.
RIL is the largest private energy sector company in India. The company has businesses spread across refining, petrochemicals and exploration, among others.
"We do not have a stable policy regime, which is very essential for any investor to come and invest, either in technology or put in a bid for exploration," Prasad told media persons on the sidelines of a FICCI conference.
The country's New Exploration and Licensing Programme was unveiled several years ago.
Says Prasad: "There is a continuous erosion of NELP by taking away several of the rights that were given under the regime. Not honouring the production sharing contract is the worst thing that can happen."
Currently, RIL is in arbitration with the Ministry of Petroleum and Natural Gas on matters related to PSC.
Prasad gave examples of several foreign companies such as British Gas, Shell, StatOil, BHP, Petrobras that forayed into India but eventually exited.
"If you see India, so many foreign companies came. They all left. There are two reasons: one is of course there is an issue of prospectivity in the Indian basins. You have to compensate that by giving an attractive fiscal regime, which we are not doing. In the contrary, we think that Indian basins are better than Saudi Arabia," the Executive Director added.
"You need to remove energy poverty. But where will it come from? It will have to come from within India," he said.
Reliance's Venezuela plans
Reliance is evaluating opportunities in Venezuela. "We are looking at two things from Venezuela. First, we have a long-term supply contract and we are looking at enhancing the quantity under that contract possibly from next year. Second, is we are looking at investing in Venezuela. We have signed an MoU and we are trying to make progress to see which particular opportunity we should be evaluating and investing," said Prasad.
Currently, RIL imports more than 300,000 barrels per day.
Prasad said that the energy-rich country has given two-three upstream, which may be coupled with some downstream options.
" In the next few months, we will have to complete our evaluation," he added.
In addition, talking about new markets where RIL would scout for opportunities, Prasad said countries such as Mexico, Iraq, US, Canada and Myanmar are attractive destinations.
Prasad also indicated that they may partner with a Government-owned company for overseas projects.
GAS PRICE
Asked if RIL would agree if the Government doesn't allow the explorer to increase the price of gas until it fulfills previous commitments, Prasad said, "I do not know if that is true. If it is then we have a problem. We clearly say this is a violation of PSC."
PENALTY
Recently, the oil regulator Directorate General of Hydrocarbons (DGH) recommended to the Government to levy additional penalty on RIL for not able to produce gas to the levels expected earlier.
"We have not been informed of any additional penalty. We are already in arbitration because this is not in line with PSC," Prasad said.