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“For Sustaining Strategic Partnerships Indian Pricing Structure needs to be Aligned with global prices”: Mr B K Chaturvedi, Member, Planning Commisssion
Jan 09, 2014

Delivering the keynote address at the Business Partners Meet “Delivering Value through Strategic Partnerships, a pre-conference event of PETROTECH 2014 co-organized jointly by the Confederation of Indian Industry (CII), ONGC and Petrotech Society, Mr B K Chaturvedi, Member, Planning Commission,  said, “Domestically, strategic partnerships are important as investments (deep water exploration) which were earlier financially unviable become viable. It is therefore critical for oil and gas companies to reevaluate these projects and develop them jointly. Another key area for strategic partnerships within India is the gas pipeline sector. Indian oil companies and the government, in particular the state governments need to work together to expedite the development of a gas network in India. On the policy front, it is essential to move towards market related pricing which is aligned with international pricing to sustain strategic partnership and encourage investment in the sector.”

Mentioning some potential areas for partnerships in the global context, he said, “India may undertake Research & Development jointly with countries like Japan and Canada in the area of gas hydrates. Also Indian oil and gas companies could explore the possiblity of forming strategic partnerships with their counterparts in other countries to undertake exploration of huge reserves in some countries (canadian Oil Sands) which are relatively unexplored”.

Mr Vivek Rae, Secretary, Ministry of Petroleum & Natural Gas, Government of India in his Special Address said, “Strategic partnerships are essentially at a Government to Government level and are driven by commonality of objective and purpose.” Highlighting some potential partnerships in the oil and gas sector, he said, “Asian gas companies need to come together and negotiate better prices for LNG. Developing an Asian Gas grid and transnational Pipelines are other key areas which have huge potential for strategic partnerships amongst governments and oil and gas companies.” Specifically in the Indian context, he said, “Strategic partnerships between the Government and the Indian oil and gas companies are a promising area as these will enable them to achieve their goals of ensuring energy security. It is also important to form and strengthen the partnerships between the Industry and the academia.”

In the course of his opening remarks, Mr Sudhir Vasudeva, Chairman, CII National Committee on Hydrocarbons &, Chairman & Managing Director, ONGC Ltd, said “While strategic partnerships are an implicit reality, there has been strong disinclination among the established global players from meaningfully engaging in this manner. However, concerns surrounding the environmental impact of our energy operations, technology insurgence (inspired by shale gas) and the emergence of new energy frontiers are key developments that have changed this defensive operating business environment. Emphasising the importance of collaborations, he said, “Better delivery of complex projects, faster technology development, greater investments toward development of core competencies, achieving operational and cost efficiencies leading to shorter turn around time; acquisition and assimilation of best practices/technology solutions are some benefits that can be reaped from these long term and meaningful partnerships.

Delivering the concluding remarks, Mr Sashi Mukundan, Co-Chairman, CII National Committee on Hydrocarbons & Regional President and Head of Country (India), BP Group Companies said, “While there are huge opportunities in the Indian oil and gas sector (vast unexplored basins, significant planned investments in storage, pipeline and distribution infrastructure, and enhancement of refining and petrochemical capacities), challenges including a difficult business environment, lack of adequate infrastructure and significant energy related subsidies are diluting the attractiveness of the sector. There is therefore an urgent need to reset the context and think out of the box to articulate and lay down an energy pathway. As strategic partners, collaboration amongst National, International and private companies, along with governments of countries and communities is the only way forward to realize this scope and scale to ensure energy security. “

Making the theme presentation, Mr Vikas Kaushal, Partner and Head Energy Process Industries for Asia Pacific, AT Kearney, said, “With the Indian oil & gas demand expected to grow rapidly, strategic partnerships across multiple stakeholders would be key to stimulate current business, enable disruptive change in the sector and build scale and efficiency to drive global competitiveness which are key priorities for the sector. In addition, these partnerships would also lead to operational efficiencies, spur innovation & R&D and infrastructure development. “ 

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