The government must be disruptive in its fiscal incentives and offer policy certainty to attract investment in the upstream sector to meits ambition of cutting oil import by a tenth, the chief executive of Vedanta Oil and Gas business has said.
Vedanta has submitted 13 applications for exploration licenses and may bid for more in the first auction under the new licensing policy, which is under way, Sudhir Mathur, CEO of Vedanta’s Oil and Gas unit, told ET in an interview. But for the licensing rounds to succeed, the government must offer contracts for longer 30-year-horizon so that companies can plan investments with certainty, and clearly defined fiscal terms that can’t be overriden by new policy measures, he said.
Upstream business carries huge risk and the fiscal regime should be such that it adequately compensates them. “More oil will become economic if the government take is lowered. And more output will ultimately help the government and the country.” Read More…
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