Modi asks Indian energy powerhouses to become MNCs

The Dollar Business Bureau

Prime Minister Narendra Modi on Monday exhorted Indian energy companies to expand their operations overseas, as he outlined his vision of creating energy corridors in the Middle-Eastern, Central Asian and South Asian regions.

“I hope that our oil and gas sector companies will take the opportunity to tie up with their foreign counterparts to explore for more equity oil… Indian energy companies must become multinational and work towards India-Middle East, India-Central Asia, and India-South Asia energy corridors,” he said.

Underlining that a stable and reasonably-priced energy is key to any country’s economic transformation, Modi said Indian energy majors need to increase their oil and gas production, while simultaneously focusing on forging partnership with energy companies in the region. He said an increased production of oil and gas would also help India spend less on its oil import bills. “I have set a target to reduce import dependence by 10% by 2022. This will have to be achieved during the period of increasing oil consumption.”

“Energy is a key driver of economic growth. Sustainable, stable and reasonably priced energy is essential for the fruits of economic development to reach the bottom of the pyramid. On one hand, to meet the increasing demand, we need affordable and reliable sources of energy. On the other, we must be sensitive towards the environment,” Modi said while addressing the Petrotech conference.

The prime minister emphasised that hydrocarbons play an important part in India’s economic growth however, there is a dire need to produce energy that is available at an affordable price for the poor. “Energy in general and hydrocarbons in particular is an important part of my vision for India’s future. It rests on four pillars of energy access, efficiency, sustainability and security,” he added.

According to the prime minister, India is slated to account for one fourth of the incremental global energy demand between 2013 and 2040 and is expected to consume more oil in 2040 than the entire of Europe.

Modi also announced a new hydrocarbon exploration and production policy to boost domestic hydrocarbon production. The policy will provide a uniform licence for exploration and production for all kinds of hydrocarbons, including shale oil and gas and coal bed methane.

This policy also covers open acreage policy, which allows bidders to select the acreage they look to explore; revenue sharing model instead of profit sharing model to reduce any scope for disputes; and marketing and pricing freedom on produced crude oil and natural gas.

Urging foreign multinational companies to invest under Make in India programme, he said, “Our constant efforts have improved India’s ranking in Ease of Doing Business. Let me assure you that our commitment is strong and our motto is to replace red tape with red carpet.”