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Dr Auriol Weigold
In mid-January 2004, The Times of India and Business Standard carried stories about the Indian Government’s decision to remove foreign direct investment (FDI) ceilings on oil refining and marketing, pipelines, and exploration, bringing each up to 100 per cent from varying percentage bases.
This decision has in mind the future rather than the present, removing anomalies in Indian oil policy in the hope of increasing foreign investors’ confidence in the country, which needs large overseas investments to meet its future energy demands.
While India is currently in surplus in refining, there is a need for heavy investment in new capacities and modern technology according to Petroleum Secretary, Mr B.K Chaturvedi. This would seem to have been the focusof his remarks in Perth, Western Australia on 26th and 27th June, 2003 when, as the program cover announced, the Ministry of Petroleum and Natural Gas presented its ‘Road Show’ – ‘Investment Opportunities in Oil and Gas India: New Exploration and Licensing Policy IV’ - this event taking place well before the removal of the FDI ceilings. (The Road Show had also been put on in London, Calgary and Houston earlier in June).
The Perth Road Show’s keynote address entitled ‘A vision for India’s oil and gas sector – a priority investment destination for international energy companies’ was given by the Minister, Mr Ram Naik, and speakers for the two day meeting also included Mr Santosh Gangwar, India’s Minister of State for Petroleum and Natural Gas, Mr J.M Mauskar, Joint Petroleum Secretary, Dr Avinash Chandra, Director General, Directorate General of Hydrocarbons, India and CEO’s of foreign and Indian companies operating in India.
What happened to the Road Show? Despite a media session, which the above officials were scheduled to hold, nothing appeared in the independently owned West Australian newspaper, which arguably contains more reports on India than any other Australian daily. Nor did anything appear in other Australian newspapers canvassed during the days leading up to and following the Road Show. WA Business News, a government-business interface that also regularly reports on Australian business with India, was silent too, as have been the Department of Foreign Affairs and Trade and other Australian petroleum industry websites.
Links from the Road Show website led to a photograph of Mr Ram Naik and other Government of India members including His Excellency Mr Rathore, Indian High Commissioner in Canberra, at the opening session, but no comment. The Ministry of Petroleum and Natural Gas Annual Report 2002-2003 briefly flags the 4th round of the New Exploration Licensing Policy, ‘sometime in the quarter of April-June, 2003’.
So what outcomes were there for India from their Road Show to the Australian oil industry in Perth last June? It is now some seven months since the event and there have been no reports of either the Road Show or subsequent follow-up
WATCHPOINT: Will the removal of the FDI ceiling in India bring Australia amongst other foreign investors to the table?
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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