TEXT :
14.58 hrs.
MR. CHAIRMAN : Now, the House will take up Statutory Resolution. Dr. T. Subbarami Reddy, the mover of the Resolution.
1458 hours
DR. T. SUBBARAMI REDDY (VISAKHAPATNAM): Sir, I beg to move:
"That this House disapproves the Oilfields (Regulation and Development) Amendment Ordinance 1998 (No. 17 of 1998) promulgated by the President on 3 September, 1998."
The proposal has come to amend the Oilfields (Regulation and Development) Act, 1948, with the intention to encourage oil exploration. Of course, the idea of the amendment is welcome, but at the same time, the House would also like to know the various facts relating to effective exploration of oil of this country. It is really painful - of course, not specifically, but still I must say - that in the last fifty years, in spite of making all efforts, our country has not been able to produce more than 25 per cent of the total demand of oil in the country. Not only that, after globalisation, the demand has been increasing, but our production of oil within the country is absolutely not increasing compared to the increase in the demand. The wells have been dried and the foreign exchange has been drained. We have been importing heavy quantum of oil.
Now, the most important problem before our country is how to explore the maximum reserves.
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* Published in the Gazettee of India Extraordinary Part-II, Section 2,dated 2.12.98
15.00 hrs. It has been an accepted fact that there is a huge quantum of gas available in our country. For instance, in the Bombay Offshore, we have 330 million tonnes of gas reserves, and in Kerala-Konkan Offshore, we can produce 70 million tonnes of crude oil. In the Cauvery basin and also in Krishna-Godavari basin, we have 100 million tonnes of gas reserves, and there are five million tonnes of gas reserves in Rajasthan. Like this, at various places, we have got gas reserves. How to explore it?
No doubt, this Amendment Bill has been brought with the good intention of reducing the royalty or increasing the royalty depending on the availability of gas, and also to encourage oil exploration. I agree with it. But at the same time, I want the hon. Minister to clearly specify as to how he is going to plan it. We came to know that the largest oil producing company in the United States of America, that is, UNICORN Corporation, the world leader in oil and gas industry, has come forward with a proposal outlining an ambitious five-year plan projects in our country requiring an estimated investment of US 4 billion dollars. They have come forward with a very good ambitious plan.
SHRI V.V. RAGHAVAN (TRICHUR): You have to raise an objection.
DR. T. SUBBARAMI REDDY :I will raise my objection.
MR. CHAIRMAN : Dr. Subbarami Reddy, please address the Chair.
SHRI V.V. RAGHAVAN :You must say what your objection is.
MR. CHAIRMAN: Please sit down. He is the mover of the Resolution and I have given the chance to him.
DR. T. SUBBARAMI REDDY : Before I raise my objection, I am telling the Minister what he should specify. Then only, I will withdraw my objection.
MR. CHAIRMAN: Please do not argue.
DR. T. SUBBARAMI REDDY : I would like to clarify to my colleague that my ultimate philosophy is to find out what is useful for the country or what is necessary for this nation and how to attain prosperity and progress. That is my philosophy irrespective of my political affiliation. The burning problem of this nation is how to explore maximum oil. Though I have my objections about this Amendment Bill, I want to highlight some important points. While taking various factors into consideration, the Minister must specify, before this Bill is passed, how he is going to utilise the offer given by the largest oil producing company in the world. One Chinese company, Shri Raghavan's favourite, has come forward to explore our oil-fields. We are very much interested to cooperate, and I am very happy to welcome it. But the moment I said America, he stood up and wanted me to raise my objection. Chinese are the first to come forward to explore oil in our country. So, I would like to know from the hon. Minister how he is going to utilise these offers to solve our burning problem. That is very important. What are his plans for the next ten years and how much is going to be produced? What are the schemes which they have finalised? There is nothing wrong in utilising anybody's help to explore oil, I mean, whether it is Russia, China, America or any other country. We should not mind that. Ultimately, we want the results.
The next point is that the Minister should explain very clearly how the increase or decrease in royalty, depending on the circumstances, is going to help us. Are there any ten-year plans and how is he going to explore? We are able to meet only 25 per cent of the total demand, and it is not a joke that we are yet to meet 75 per cent of the demand. How can an economically backward country like ours afford so much of foreign exchange? You must convince the nation and this House by explaining how you are going to produce the oil to fill up the gap.
After listening to the Minister and when I get the opportunity, I will say whether I will withdraw my objection or support this Bill.
SHRI V.V. RAGHAVAN: Sir, my objection is on an entirely different ground.
MR. CHAIRMAN: You will get a chance after the Minister's reply.
... (Interruptions)
SHRI V.V. RAGHAVAN: The Chairman has allowed me.
THE MINISTER OF PETROLEUM AND NATURAL GAS (SHRI VAZHAPADY K. RAMAMURTHY): Sir, the hon. Members who want to speak on the Statutory Resolution have given their names. Once that list is exhausted, I will reply to them.
MR. CHAIRMAN: There is no need to give a chance to everybody. The Mover of the Resolution has already spoken. Now, the Minister will reply, and then I will give a chance to the other Members.
SHRI V.V. RAGHAVAN : Sir, my objection is that the Government should not have given to itself the power to fully exempt the royalty by promulgating an Ordinance. How can the Government give to itself this power without the consent of the House? It is wrong.
MR. CHAIRMAN : The Minister will refer to it in his reply. The Minister may now move that the Bill be taken into consideration.
THE MINISTER OF PETROLEUM AND NATURAL GAS (SHRI VAZHAPADY K. RAMAMURTHY): I beg to move:
"That the Bill further to amend the Oilfields (Regulation and Development) Act, 1948, be taken into consideration."
Sir, the Mover of the Statutory Resolution, hon. Member Shri T. Subbarami Reddy, has raised certain preliminary objections and also wanted to know as to how far our country would become self-sufficient in oil production. First of all, I would like to say that if you take into account the growing demand, growing population, the fast pace of development, the depository position of the natural wealth in oil sector will not suffice for our requirement. It is not going to be enough to cope with our demand. We will always be dependent on the import of crude oil.
Once some Western countries came up with the idea that India did not have any oil deposits. Fortunately our Russian friends found that our East and West coasts and also the northeastern parts of our country were having huge deposits of oil which would meet some of our requirement. Accordingly, ONGC, GAIL, IOC and the other national oil companies were established in our country with the cooperation of the Russian experts. Whatever crude we are able to enjoy now at the Bombay High is because of their help. I have to appreciate their help at this juncture.
With regard to exploration effort, ONGC is an organisation which is tirelessly going on with its effort to found oil. They have completed 3-D seismic survey throughout the country including the Andaman & Nicobar Islands and the Himalayan ranges. Deep-sea drilling is one of the recent innovations at international level. Our ONGC and other associated companies are going in for deep-sea drilling now. We can only pin hopes on this deep-sea drilling and also the shallow water drilling, particularly in the Krishna, Godavari, and Cauvery basins.
It is not that we have slowed down our efforts. Unfortunately the demand is increasing every year at a projected rate of 7 per cent to 8 per cent. In the Eighth Five Year Plan, our requirement was 74 million tonnes. The estimated demand during the Ninth Plan would be not less than 134 million metric tonnes. Now our import, including crude oil and petroleum products, is only 64 per cent. So, our effort has not slowed down but the demand has overtaken us. I assure the House that our effort will not slow down. We promulgated this Ordinance to accelerate our production.
This Bill was introduced in the last Session but it could not be passed. The Ordinance had to be promulgated because of the urgency for a new exploration licensing policy which would augment private foreign investment and joint ventures in the field of oil exploration in this country.
Sir, for this, we need this kind of an amendment to the existing clause. This is only an enabling provision. By doing so, the House is going to empower the Government to make some adjustments in the rate of royalty and period. Some kind of a power will also be given to the Central Government to exempt where the exploration or the profit sharing exploration was going on and it had failed.
The present position is that only one rate has to be given as royalty to all the petroleum products. Now, according to this amendment, it will vary. The fixation of the royalty will vary from product to product and also by the period for which the royalty is to be fixed. The existing practice is that it is fixed once in a block of three years. Now, it will be fixed every year, or whenever the Government feels, it can fix the royalty.
So, I hope that the whole House will agree with me. This is only an enabling provision, a small amendment. But it will accelerate the production of crude oil in our country with the help of private investment, foreign investment and joint venture.
Interruptions)
SHRI VAZHAPADY K. RAMAMURTHY: That is left with the Speaker... (Interruptions)
MR. CHAIRMAN : If your suggestion is accepted by all the Members, we can pass the Bill without discussion.
... (Interruptions)
DR. T. SUBBARAMI REDDY : Sir, about the Telephone coupons and the Gas coupons, we will take up the matter separately. There is also some order by the Court... (Interruptions)
MR. CHAIRMAN: Yes, we will discuss this later.
SHRI MADHUKAR SIRPOTDAR (MUMBAI NORTH-WEST): Directives were given by the hon. Speaker in this regard. What jurisdiction has the Court got there? ...(Interruptions)
But the point before us is that the amendment that you have brought gives so much executive authority that they can misuse this authority regularly. Even where we find that some of the Acts are draconian, some of the traders in the business community have gone to the extent of being responsible for the downfall of certain Governments by their acts, by hoarding and misdeeds. If that were to be the case and if you were to come with so much softness in giving powers to the executive in amending the royalty on any occasion or for any situation, then we can certainly understand about how much misuse will be done by the executive authorities. More particularly, in the oilfields, the people know that a lot of mischief is being done by various executive authorities which runs into thousands of crores or rupees. It is not hundreds of crores or tens of crores. It is running into thousands of crores.
There are allegations that the crucial information is being given only to certain corporations by which they are taking undue advantage.
In certain cases, the share of the oil is so much that some multinationals are getting undue benefits and the transactions also run into thousands of crores of rupees.
We are all aware - it may not be scientific but this is what we feel that gas and oil are available in abundance in the Krishna-Godavari basin. Later, it was told that not oil but only gas was available. A public statement has been made by the hon. Minister as well as others that there will be an abundance of gas in the Godavari basin which could be put to use for generation of power and also for other industries. Till today, we are not aware of anything on this. There has been no allocation more than what was allocated earlier.
I will restrict myself to the amendments made. It is said that different rates will be charged as royalty for the same mineral oil or gas that is explored in different conditions and the difference could even be on a monthly basis. How can there be a check on the misuse by any officer if it is done on a monthly basis? If the hon. Minister were to think about it, he should keep in view encouraging exploration and getting more and more gas and oil to save foreign exchange or utilise the maximum resources. We do understand it, but certain specified prices could be fixed for royalty under a set of different circumstances. So, I only wish that he should not be too liberal in giving authority to executives who will go beyond not only his control but even beyond the control of Parliament.
I am of the opinion that by this amendment Parliament is deprived of the check that they can have on the bad elements in the executive. It is said that the royalty charged will not be more than twenty per cent of the prices at the exploration point. There is also a mention of `the same price'. I want to seek a clarification from the hon. Minister whether there will be some increase also or will there only be a decrease.
The fluctuation of oil prices in the world market are so frequent and so varied that they are unimaginable. Sometimes, there is a fluctuation of even a hundred per cent to two hundred per cent. I do not know whether this particular aspect has been taken into account or not. All these factors were to be taken into account while bringing this amendment. I want the hon. Minister to be more cautious.
Instead of passing this Bill now, he may go back and make an assessment by going into the details himself and keeping in view the situation of the executive authority's misuse of power in this country. I think, it will be more sane for him to do that. I request the hon. Minister to refer it to a Joint Committee of Parliament to decide. I am suggesting this not to come in the way of his objective or intention but to plug the loopholes and restrict the misuse of power by the executive authority.
The third amendment, which deals with empowering and making consequential amendments under section 6 of the Act says, `laying the notifications before Parliament'. This means, giving the executive authority the right to make amendments beyond the purview of Parliament. I think, it is improper to give the executive authority the right of making amendments outside the House.
With these few words, I request the hon. Minister to be more cautious and do the needful by not allowing the officials to misuse the power to the detriment of the nation and the people.