Govt sees $150+ oil, price hike on Jan 17th

The government estimates international oil prices will cross the $150 per barrel by next year, Union petroleum secretary M S Srinivasan said here on Monday highlighting concern on the scenario.

The senior bureaucrat's statement comes ahead of a meeting of the group of ministers headed by external affairs minister Pranab Mukherjee on Thursday to take stock of the situation and an increase in fuel prices for the first time in 18 months.

He was speaking at the Seventh Biennial International Conference & Exposition on Petroleum Geophysics here on Monday.

Crude oil hit $100 to a barrel for the first time on January 3 before easing off 5.3 per cent last week on fears of a slump in demand from developing countries.

Asked to react, the Union Petroleum minister Murli Deora refused to indicate the extent of increase the government would effect stating the group of ministers was scheduled to meet late this week.

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Responding to a demand voiced by Indian exploration companies for an extension of licences by two more years under the New Exploration Licensing Policy on account of the shortage of rigs being faced by them, the petroleum secretary said a decision will be taken within 15 days.

ONGC and other oil and gas companies in the country have sought a two year extension in the licences which are valid for years currently.

He said the thrust on oil exploration has been increased from 10 per cent in the past to 30 per cent this year.

"We will take up exploration of our 80 per cent of our resources by 2015."

Meanwhile, oil exploration companies like ONGC are considering sharing rigs with rivals such as Reliance Industries, ONGC chairman and managing director R S Sharma said on the sidelines of the event.

"The scarcity of rigs and spiralling costs have hit the industry hard, while projects are falling behind schedules," Sharma said.

The industry had represented to the government for monetary relief and a moratorium on tariffs apart from an extension of the licence period by two years for completing the exploration activities in the oil blocks.

Sharma also said that the production of crude oil and gas from the ageing oil and gas fields had been falling by 7-8 per cent every year and hence the major thrust for more exploration in the 11th Plan period.

At present ONGC was producing 26 million tonne per annum of oil and 24 Million tonne per annum of gas from its domestic wells.

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