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New Delhi, Sept. 19

THE Petroleum Secretary, Mr S.C. Tripathi, has said that international oil and gas majors Shell and ConocoPhillips have offered to sell Australian liquefied natural gas (LNG) to the country. "Shell and ConocoPhillips have offered us Australian LNG. They were wanting to know the demand for natural gas in India and the current deficit," he said at a seminar on oil and gas exploration opportunities in Australia here on Monday.

He said that ConocoPhillips is selling LNG to South-East Asia at a price that is not significantly higher than that at which India has contracted LNG from Iran. India has contracted 5 million tonnes per annum of LNG from Iran for 25 years at a delivered price of $4.10 per million British thermal unit (mbtu). Iranian LNG is to arrive in 2009-10 and there still was a huge unmet demand, which Australia can fill, Mr Tripathi said. India has an unmet demand of 50 million standard cubic metres per day of natural gas.

Both Shell and ConocoPhillips have LNG production facilities in Australia and are looking for markets. The Secretary said that the talks with the Australian companies were at a nascent stage and the commercial terms of the deals would be discussed with the respective companies. Australia has also offered 29 offshore blocks for bidding for international oil firms to attract investment in exploration. Indian firms have been exhorted to participate in the bidding round.

This offers great opportunity for the companies in the hydrocarbon sector, the Secretary said adding that Indian companies can look at Australia for developing hydrocarbon resources in that country and using it for India's development needs.

Cross-holdings: The Petroleum Ministry is moving a Cabinet note to allow the public sector oil companies to offload their cross-holdings in each other. According to the Petroleum Secretary, "the Cabinet approval is being sought for an in-principle nod to end cross-holdings among oil PSUs."

The decision to refer the issue of unlocking the cross-holding to the Cabinet was taken at a recent meeting chaired by Petroleum Minister, Mr Mani Shankar Aiyar.

In 1998, the three major oil and gas companies ONGC, Indian Oil Corporation and GAIL (India) Ltd, had purchased part of the Government's holding in each other to help reduce fiscal deficit. While both ONGC and IndianOil own 4.83 per cent each in GAIL, the latter, in turn, owns a 2.4 per cent stake in ONGC. While IOC has 9.61 per cent stake in ONGC, the latter has a 9.11 per cent stake in the former. The funds accrued can be used by the companies for expansion and acquisitions, according to the Petroleum Ministry.

(This article was published in the Business Line print edition dated September 20, 2005)
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