Privatise Old Oil Fields: Survey

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[With international crude oil prices touching an all-time high of $102 a barrel, the Economic Survey today advised privatisation of old oil fields to raise output and reduce India's import dependence. State-run firms Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) have seen oil output fall from old fields like those in Gujarat and Assam, and new technology will be needed to raise recovery. India, which spent $48.389 billion to import its crude oil needs in 2006-07, has already spent $48.02 billion on crude imports in the first nine months of the current fiscal because of rise in international oil prices. &quot;The international price of crude oil and petroleum products has increased phenomenally in recent months. The crude oil price of the Indian basket touched an all-time high of 92.13 dollars per barrel on November 26, 2007,&quot; it said. The surge in global oil prices had &quot;a significant impact on the oil marketing companies and the Indian economy as India imports about 72 per cent of the crude oil requirement.&quot; The government this month raised price of petrol and diesel by Rs 2 per litre and Re 1 a litre respectively, that could contribute 0.19 per cent increase in inflation. The pre-Budget survey that was tabled in Parliament today, suggested: &quot;Sell old oil fields to private sector for application of improved/enhanced oil recovery techniques.&quot; Besides stepping up domestic production, the remaining deficit would have to be bridged by entering into strategic geo-political alliances to access energy assets in the region, the Survey said, pointing to the need of making investments in energy chain in the Middle-East and Africa. Reducing incremental import dependence of the country's energy requirement requires tapping of coal reserves, accelerating exploration of oil and gas, fully exploiting the nuclear and hydro potential for power generation and expediting programmes for energy generation through renewables, the Survey stated. While production from old fields declined, the award of 162 new areas for exploration under New Exploration Licensing Policy since 1999 have led to 46 oil and gas discoveries to add 600 million tons of oil equivalent hydrocarbon reserves. As on April 1, 2007, the investment made by Indian and foreign companies in NELP blocks was 3.887 billion dollars, out of which only 30 per cent was by the national oil companies. The Survey said the government has tried to equitably distribute the burden of oil price hike among the various stakeholders, namely upstream companies, oil marketing firms, the government and consumers. &quot;The government has decided to issue oil bonds to the tune of 42.7 per cent of the total estimated under-recoveries and make the upstream oil companies bear approximately one-third of the under-recoveries,&quot; it said. Crude oil production was marginally up during April- November 2007 at 22.69 million tons as against 22.56 million tons during the corresponding period in the previous year. Natural gas production at 21.35 billion cubic meter during April-November showed an increase of 2 per cent. The domestic refining capacity was 148.97 million tonnes as on 1 April 2007. Refined oil product production during April-November at 103.06 million tonnes shows an increase of 8.3 per cent. (PTI)