Gas Price Hike Will Boost Exploration in India

State-run Oil India feels that gas price hike is crucial for further investment in exploration activities in the country.

In an interview to CNBC-TV18 TK Ananth Kumar, director-finance, Oil India said that the company is eagerly waiting for a revision in gas price.

The Indian government has appointed the Rangarajan Committee to look into the gas pricing issue. The panel has recommended that pricing domestically produced natural gas should be at an average of international hub prices and cost of imported LNG instead of present mechanism of market discovery.

The oil ministry has last month moved a cabinet note to raise the price of natural gas produced by public sector and even private firms to around $6.7/mmBtu from the current $4.2.

“The gas price revision would certainly be most welcome as we are expected to invest quite huge amount in exploration and development. Additional realization would certainly benefit this,” Kumar told CNBC-TV18

On the issue ONGC Videsh Limited (OVL) and OIL having signed a definitive agreement with Videocon Industries to acquire its 10 percent stake in Mozambique block, Kumar told the news channel that ONGC has already withdrawn the press release and the matter is still under discussion. “As and when the things materialize, we will definitely communicate.”