Nothing remotely comparable to the discoveries of oil and gas reserves in India by Indian companies has been made by the international oil companies. There is indeed total failure on the part of international oil companies to find oil or gas in India. This has not been fortuitous either.

The international oil conglomerates do not, after all, lack the expertise and technological inputs for oil-gas exploration. The fact is that the international oil companies have little interest in finding oil or gas in India. Their global operations are closely linked to the strategic interests of the countries of their origin, especially the USA. India does not still figure in their scheme of thinking and interests.

It is not be amiss in this context to also mention the performance of the British Gas of U.K. It insisted on exclusive management rights in the Panna-Mukta and Tapti onshore exploration project under collaborations arrangements with ONGC even tough it held only 40 per cent equity in this project. Their management rights were used to extract high technology fees and extravagant salaries for their “experts”. ENRON, another US company sold its equity in an oil and gas exploration project to the British Gas which also brought exploration rights from with Shell Corporation, which had kept exploration in Rajasthan in abeyance for four decades. The U K company, which works independently of the international oil companies has only discovered oil in Rajasthan. This was welcome. It is odd. However, the government still relied primarily on international companies for exploration of oil and gas in India for collaboration with ONGC of India.

It is necessary for oil and gas exploration to make headway on proper lines and become cost effective. For this to happen, foreign oil majors must be barred from having any exclusive management rights in oil exploration, which should be reserved for only for Indian companies in the prospective oil blocks. This was shown results in the case of Reliance for exploration of oil and gas in India.

The energy supply in India is still severely constrained by shortages. The indigenous effort for exploration should, therefore, be stepped up with adequate investment of rupees as well as foreign exchange for the purchase of suitable technologies and other inputs. This would be the most rewarding use of the burgeoning exchange reserves of India.

The consumption of petroleum products, which has been feverishly promoted in the last decade, is also required to be curbed. The dismantling of administrative price mechanism for petroleum products has created fresh problems. The oil refinery companies in the public sector have suffered huge losses on this account. The sale of equity of public sector oil companies is bound further and weaken their ability to raise internal resources for exploration of oil and gas in India.

The reserves of crude oil in India, discovered and developed in the public sector during the 1970s have been depleted at a fast rate since the early nineties. The proportion of indigenous crude oil, which had touched 80 per cent, has come down to 30 per cent of total consumption of oil and gas in the end of nineties. The import cost of crude oil is such that it is not sustainable for India. The handing over of the already discovered oil fields and related facilities in India for the international oil companies to develop almost gratis, as part of the globalisation - privatisation policy has not given any positive returns and must be revised, in fact reversed. This has now become urgent after the flip - flop over the oil discovery by the UK company in Rajasthan, which has rights to sell its shareholding to dubious Vedanta, which claims to be global MNC, albeit headed by an Indian businessman of shady anti - labour past in India and is still excessively exploitative of Indian labour in its metal business.

The assumption that a rise in the consumption of petroleum products is inescapable for speeding up the modernization of economic growth process in India is taking its heavy toll. It is good that some private Indian enterprises have begun to supplement the effort of the oil and natural gas in public sector to find oil and gas reserves in India. The reserves should be husbanded carefully and deployed to get optimism value. The national reserves already discovered must-not-be handed over to foreign interests for exploitation. The globalisation policy has already weakened gravely the national oil enterprise. The government's programme for disinvestment and privatization of PSUs in the oil sector can only weaken the technological and management capacity of Indian in this strategic sector.

The indigenous development of the oil sector - exploration, refining and marketing - is of paramount importance in the prevailing conditions to stem the ongoing drift towards energy crisis, which can surely overwhelm the country's economy and undermine national security.
(IPA Service)