'Jab tak dhundenge nahin....': Vedanta's Anil Agarwal seeks policy changes for oil exploration in India

Vedanta chairman Anil Agarwal on Friday said India needs holistic policy changes to reduce its dependence on importing oil and increase the exploration. 

To illustrate his point, Agarwal pointed out that Asia's first oil well was dug in Assam's Digboi over 150 years ago. He said that India's proven oil reserves are three times its annual consumption and yet it imports almost 90% of its crude. 

"Oil & gas is all about exploration. Jab tak dhundenge nahin, tab tak milega kaise? (How will we find if we don't search for it?)," said Agarwal on X platform (formerly Twitter).

"Our domestic entrepreneurs have great capacity and perseverance to do this successfully and our Government is production minded, not revenue-minded. We have a very progressive minister (Hardeep Singh Puri) and I feel if policy changes are implemented, the entire oil and gas scenario can transform," said Agarwal while listing out four policy changes. 

"1. Government is giving subsidies or incentives in all key sectors whether agriculture, electronics or pharma. But not for anything below the ground including oil and gas despite imports touching almost $100 per barrel. Some production-linked or exploration-linked incentive must be given. 

2. Taxes amount to 60-70% of the topline. This should come down to maximum 30% in line with international benchmarks.

3. Currently, a licence is given only for 10 years. It should be given for life of the well or at least 70 years for maximum investment.

4. Clearances take a very long time and delay the process of exploration and production. We need to introduce self-certification to avoid these delays," added Agarwal. 

While the energy transition is going well in India, all estimates suggest that the demand for oil will double in the next 20 years from 5 million barrels per day to over 10 million barrels per day, Agarwal added. "Unfortunately, India’s production is falling every year because of the many constraints, including endless litigation with government. Isko reverse kiya ja sakta hai. Yeh saare reform kuch hi mahino mein poore kiye ja sakte hain (all these reforms can be undertaken in a few months). Let’s do it," said Agarwal in his X post. 

Meanwhile, oil prices were little changed on Friday, but headed for a second week of losses as supply concerns driven by conflict in the Middle East eased, while the demand outlook from the world's top crude importer China remained uncertain.

Brent crude futures were down 13 cents, or 0.1%, to $86.72 a barrel at 0955 GMT, while US West Texas Intermediate crude futures slipped 10 cents, or 0.1%, to $82.36 a barrel.

Both benchmarks gained more than $2 a barrel on Thursday, but were on track to lose about 4% on the week.