The Hindu Business Line : Centre's assurance on Mangalore SEZ

THE Union Ministry of Petroleum and Natural Gas has informed the Kanara Chamber of Commerce and Industry (KCCI) that the Oil and Natural Gas Corporation (ONGC) has been advised not to commit itself to huge financial investments in downstream sectors such as LNG terminals, gas pipelines, petrochemicals and power plants.

A letter by the Joint Secretary in the Ministry, Mr Sunjoy Joshi, to the KCCI President, Mr A. Srinivasa Rao, said that ONGC being the flagship exploration and production company needs to put in far greater efforts into the exploration of oil and gas in the frontier basins which have remained unexplored or inadequately explored.

It said that ONGC would be required to make substantial investments in this sector on a priority basis so that the country can reduce its burgeoning deficit of domestic oil and gas in the coming years.

It may be mentioned here that the ONGC had signed an agreement with the Karnataka Government and the Kanara Chamber of Commerce and Industry (KCCI) in August to develop a coastal special economic zone (SEZ) at Mangalore and to invest close to Rs 25,000 crore staggered over a few years towards energy projects, such as gas terminal, in the State.

"From a national perspective we are of the firm conviction that exploration and production functions of ONGC should not be ignored at the cost of other such projects that can very well be taken up by other entities so that the oil security of the country does not get endangered," Mr Joshi said.

The letter said that the Ministry would do all it can to ensure the success of the Mangalore Special Economic Zone and Bangalore Petrochemicals complex.

The Ministry has requested the Karnataka Government to explore the feasibility of setting up the envisaged projects through agencies, including PSUs, having core competence in these areas of activity.

The Ministry is also in touch with the Chief Secretary of Karnataka Government; CMDs of ONGC, HPCL, GAIL, besides President of MRPL; and CEO & Managing Director of Petronet LNG Ltd, to discuss investments by oil PSUs in coastal Karnataka, the letter added.

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