'Our oil companies are wanting to rush into every fields — from upstream (oil and gas exploration and production) to downstream (refining and marketing) to midstream (transportation and storage business). We are not sure if that is the right thing to do,' he said addressing the Energy Security Conference organised by CII.
As a result, oil producer ONGC is now operating power plants, has bought a refinery, opened petrol pumps and is planning a fertiliser unit, while refiner Indian Oil Corp (IOC) is taking upstream exploration blocks. Rae asked if ONGC should start operating petrol pumps and selling petrol and diesel instead of focusing on finding and producing more oil and gas which was of more vital importance for an energy deficit country like India.
'That is an important issue on which there is no clear decision that has been taken in the matter. And sometime what happens is that in the process of a drift, you drift into everything, you set up fertiliser plants, you set up power plants, you set up petrol pumps and so on. But then the question is what is our core competence, what is your core mandate. And are you diluting your core competence and your core mandate by moving away,' he said adding there were no clear answers to these.
Rae said companies like ONGC which have financial muscles can set up a power plant in Tripura or set up a fertiliser plant to monetise the gas for which there are no takers. It can also take over Mangalore Refinery and then turn it around.
'But in my opinion, ONGC should monetise these assets quickly through its resources and then divest. So monetise and divest that should be the mantra,' he said. 'You are generating wealth in the country out of dead assets. Once they are viable you divest and you get your money back and you move to others.'
This way, a company like ONGC can generate enough return on its capital as well as keep its focus on its core competence of oil and gas exploration and production.
Rae however said his suggestion to ONGC top brass to divest their non-core assets have not generated favourable response so far.
ONGC's diversification into non-core business like fuel retailing, oil refining and petrochemicals had even previously raised eyebrows in the oil ministry and the company had to briefly go slow on these projects. But it has again started these.
Coal India to get CBM gas exploring right
NEW DELHI: State miner Coal India Ltd (CIL) would soon be empowered to explore coal bed methane (CBM) gas in its mines, Petroleum Secretary Vivek Rae said on Wednesday. ‘We are about to authorise Coal India to explore its coal blocks for coal bed methane,’ Rae said in his address at the Energy Security Conference 2013 here.
The conference was organised jointly by the ministries of external affairs, power and petroleum and the Confederation of Indian Industry. The petroleum ministry has auctioned 30 CBM blocks while three others have been allocated on nomination basis. It is the authority for CBM exploration.
Rae said India has better CBM opportunities than shale.
‘The prospects for CBM in India are better than for shale gas and oil. Shale in India does not have that revolutionary potential as is being seen elsewhere,’ Rae said.
As the fourth largest coal producer in the world, India holds significant prospects for CBM exploitation. As per the Directorate General of Hydrocarbons, the country’s CBM reserves have been estimated to be around 4.6 trillion cubic metres. The current production of 0.15 million standard cubic metres per day from three CBM blocks is likely to touch 7.4 million standard cubic metres per day by 2013.
As a result, oil producer ONGC is now operating power plants, has bought a refinery, opened petrol pumps and is planning a fertiliser unit, while refiner Indian Oil Corp (IOC) is taking upstream exploration blocks. Rae asked if ONGC should start operating petrol pumps and selling petrol and diesel instead of focusing on finding and producing more oil and gas which was of more vital importance for an energy deficit country like India.
'That is an important issue on which there is no clear decision that has been taken in the matter. And sometime what happens is that in the process of a drift, you drift into everything, you set up fertiliser plants, you set up power plants, you set up petrol pumps and so on. But then the question is what is our core competence, what is your core mandate. And are you diluting your core competence and your core mandate by moving away,' he said adding there were no clear answers to these.
Rae said companies like ONGC which have financial muscles can set up a power plant in Tripura or set up a fertiliser plant to monetise the gas for which there are no takers. It can also take over Mangalore Refinery and then turn it around.
'But in my opinion, ONGC should monetise these assets quickly through its resources and then divest. So monetise and divest that should be the mantra,' he said. 'You are generating wealth in the country out of dead assets. Once they are viable you divest and you get your money back and you move to others.'
This way, a company like ONGC can generate enough return on its capital as well as keep its focus on its core competence of oil and gas exploration and production.
Rae however said his suggestion to ONGC top brass to divest their non-core assets have not generated favourable response so far.
ONGC's diversification into non-core business like fuel retailing, oil refining and petrochemicals had even previously raised eyebrows in the oil ministry and the company had to briefly go slow on these projects. But it has again started these.
Coal India to get CBM gas exploring right
NEW DELHI: State miner Coal India Ltd (CIL) would soon be empowered to explore coal bed methane (CBM) gas in its mines, Petroleum Secretary Vivek Rae said on Wednesday. ‘We are about to authorise Coal India to explore its coal blocks for coal bed methane,’ Rae said in his address at the Energy Security Conference 2013 here.
The conference was organised jointly by the ministries of external affairs, power and petroleum and the Confederation of Indian Industry. The petroleum ministry has auctioned 30 CBM blocks while three others have been allocated on nomination basis. It is the authority for CBM exploration.
Rae said India has better CBM opportunities than shale.
‘The prospects for CBM in India are better than for shale gas and oil. Shale in India does not have that revolutionary potential as is being seen elsewhere,’ Rae said.
As the fourth largest coal producer in the world, India holds significant prospects for CBM exploitation. As per the Directorate General of Hydrocarbons, the country’s CBM reserves have been estimated to be around 4.6 trillion cubic metres. The current production of 0.15 million standard cubic metres per day from three CBM blocks is likely to touch 7.4 million standard cubic metres per day by 2013.