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India’s oil ministry turns to MEA to spur US investment

21st June 2013

Indian petroleum ministry seeks aid from ministry of external affairs to facilitate investment from US firms in country’s energy sector

India’s oil ministry turns to MEA to spur US investment
New Delhi is seeking a closer relationship with the US which will encourage the exchange of technology and expertise

India’s petroleum ministry wants the ministry of external affairs (MEA) to encourage US firms to invest in the country’s energy sector, The Hindu reported on Wednesday, following reports that participation from US E&P firms in the country’s oil and gas tenders under the New Exploration Licensing Policy (NELP) had not yielded the desired results.

 

US firms have raised several concerns over the NELP process related to data availability, fiscal terms, policies and regulations, as well as visitor programmes. While these companies were given an opportunity to voice these concerns, that did not encourage them get on board, the petroleum ministry told the MEA in a note.

 

“The petroleum ministry is of the view that any forum or platform which can encourage US firms to invest in India should be explored,” it read. The ministry also recommended cooperation between both countries in the area of unconventional gas development, as New Delhi is seeking a closer relationship with the US which will encourage the exchange of technology and expertise.

 

The effort would include promote mutual private sector investment in upstream oil and gas sectors in US and India to advance mutual energy security goals. “India has sought greater investments by US energy firms in its upstream oil and gas sector and the Indian firms are also seeking to make additional investments in the US oil and gas sector. We have to engage more intensely with the US-India Business Council (USIBC) to focus on the energy security issue,” The Hindu quoted a senior petroleum ministry official as saying.

 

Several oil majors have turned their attention to the country as a strategic investment hub. After more than a decade, Shell has once again moved into India’s E&P sector.

 

BP has been quite active in India’s energy sector of late. At the end of May, the company announced a significant gas condensate discovery in the deepwater KG D6 block, offshore India. This followed BP’s first board meeting in the country, which took place two weeks prior,  in a bid to increase its ties with the nation’s energy sector. Last year, it made public its longer-term interest in meeting India’s booming energy demand via LNG exports to the country.