India plans to significantly increase new private players in the oil and gas industry to reduce imports, oil and gas secretary Tarun Kapoor said on Wednesday.
“We would like the private sector to come in a big way,” Kapoor told a webinar on Atma Nirbhar Bharat (Self-reliant India).
India is the third-largest importer of oil in the world currently and has been exploring ways to reduce its import bill. Kapoor said that the government wants to have at least 20-25 strong players in oil exploration and production in the country from only two that are existing today.
“We want companies who have the capability to take on blocks (for exploration and development.) whenever they are offered. Now we have very good data and it should be easy for companies to bid,” he added.
Low crude oil prices that are currently hovering around $40 per barrel have dimmed interest in oil and gas exploration. Analysts expect a recovery in prices from next year in line with broader industrial demand.
Kapoor said that the government also wanted components of equipment for the oil and gas sector to be sourced primarily from within the country. Currently a bulk of the equipment comes from overseas.
Similarly, the government also wanted to reduce import of biofuels and have more private players in midstream and downstream segments.
The government is also working to lessen the price pain for oil and gas sector by providing reduction in goods and service tax, although this is more likely to apply to the gas sector, he added.However, he said the finance ministry is finding it tough to balance the interests of all segments aa virtually have been affected by the pandemic.
“We know that the sector is a little stressed because of low prices,” Kapoor said, adding that his ministry was trying its best to provide more relief.
Rajeev Mathur, executive director at Gas Authority of India Limited, said that the government was working on a plan to boost the share of natural gas in the energy mix from 6% to 24% over the long term, while in the medium term they were looking at first achieving around a 15% share.
He said they were in the process of introducing a single natural gas grid for the entire country that would be able to distribute gas to around 70% of the population.
The project will involve around Rs 90,000 crores investment and an even bigger investment for establishing a pan-India retail network, Mathur added.