The Ministry of Petroleum & Natural Gas is hopeful of resolving issues relating to taxation of petroleum products with the Finance Ministry in a manner that would not affect the investor sentiment for the bidding process of NELP VII, Mr. Murli Deora, Minister of Petroleum and Natural Gas, said on Tuesday.
Speaking to media persons after inaugurating the 5th Asia Gas Partnership Summit, organized jointly by GAIL and FICCI, Mr. Deora said: “We do not consider the tax issues to be a deal-breaker in so for as NELP VII is concerned. The last date for receipt of investor bids is April 25, 2008, and we are hopeful that the issues would be resolved before that.”
Asked about responses for the upcoming exploration round and whether the tax issues would affect the sentiment, Mr. M. S Srinivasan, Secretary, Ministry of Petroleum & Natural Gas said, past experience shows that 85-90% of the responses come in during the last two days of the deadline for the receipt of exploration bids. A clear picture would emerge only then, he said, adding that the issues regarding taxation would be amicably resolved.
Deora said, he would be traveling to Islamabad next week for vital discussions on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. The meeting would be held on April 23 and 24, which will be followed up with bilateral talks with the Pakistani authorities. “There are some issues such as the charges to be levied by Pakistan for transit fees, but I am optimistic that we would be able to resolve them,” he said. A technical team from India would be leaving for Islamabad on Tuesday to lay the groundwork for the discussions on the pipeline, the Minister said.
Regarding the issuance of oil bonds, Mr. Deora said, the Cabinet Committee has decided that the Finance Ministry will determine the quantum of bonds to be issued in consultation with the Ministry of Petroleum & Natural Gas.
In his inaugural address, the Minister pointed out that Asian countries have natural areas of commonalities and synergy in social, economic and technological spheres. A multifaceted economic partnership will underpin more securely our traditionally close relationships. India on its part is ready to play sheet anchor role in this endeavour, he said.
Deora said, the governments of the region must and will play their role of providing a transparent, attractive and stable policy and regulatory regime. At the same time, the role of the business community to build a stable and strong economic partnership is equally important. The Indian industry has the full support of Government of India. The government and state-owned enterprises, which have increasingly occupied a centre-stage in the changed scenario on the world oil and gas domain, must play a proactive role.
Indian firms, he said, were attaining global levels in quality and output. Indian public and private firms have a lot of expertise and skill in various aspects of the gas value chain, which could be utilized to good use through mutual partnerships.
The Government of India, Mr. Deora said, had set-up Rajiv Gandhi Institute of Petroleum Technology, an Institute of national importance to provide training facilities at par with IITs to meet the ever-increasing requirement of trained engineers and technicians in the field of hydrocarbon sector. India is willing to share its excellent training facilities and experience for the mutual benefit.
Dinsha Patel, Minister of State for Petroleum & Natural Gas, underlined the need for utilizing natural resources like natural gas for the uplift of the poor. He emphasized the importance of energy security, for sustained and inclusive economic growth.
Speaking on the occasion, M S Srinivasan, Secretary, Ministry of Petroelum & Natural Gas, said the policy on utilisation of natural gas should primarily be determined by considerations of national security, food security and energy security. Without energy security, he cautioned, national economies would come to a halt. Mr. Srinivasan said, pricing was a key issue in the utilization of gas. If the gas sector is to grow globally and locally, it is imperative to make it worthwhile for the producers and the users of gas as substitute fuel.
U D Choubey, Chairman & Managing Director, GAIL (India) Ltd., proposed formation of a Gas Cooperation Forum of Asian countries which could ultimately give shape to Asian Federation as role of governments becomes paramount in cross-border natural gas projects. The basis of cooperation could be in trade, investment, technology transfer and R & D. He said Asia accounts for 70% of the total LNG trade. Dr Choubey suggested concrete multilateral measures like harmonization of standards and fiscal or taxation, overarching energy charter that defines legal and regulatory framework and cross border gas trade through signing of MoUs and Transit Protocols.
Y K Modi, former President, FICCI, pointed out that energy security was one of the biggest challenge faced by national economies, particularly of developing countries. In this context, he said, Asia was emerging as a hub of energy demand and therefore Asian countries needed to act in concert to balance their energy needs.
The inaugural session of the two-day summit was also addressed by Datuk (Dr.) Abdul Rahim Hashim, Vice President, International Gas Union & Vice President,, Research & Technology, PETRONAS, Malaysia; Mr. R S Sharma, CMD, ONGC; Mr. Sathak Behuria, Chairman, IOC; Mr. Andre Mernier, Secretary General, Energy Charter Secretariat, Brussels; Mr. Ron P. Billings, Vice President, LNG, ExxonMobil Gas & Power Marketing Company, USA; and Mr. S. Sundareshan, Additional Secretary, Ministry of Petroleum & Natural Gas.
The two-day Asian Gas Summit has been organized by jointly FICCI and GAIL (India) Limited and supported by International Gas Union (IGU). Industry leaders from across the globe are be participating in the conference.The theme for the Fifth Asia Gas Partnership Summit is “The Asian Gas Market and Energy Security”. More than 300 delegates are participating in the Summit with over 100 national and international companies in the hydrocarbon sector.
