Report On Kelkars Report And Committee AOGO

Report On Kelkars Report And Committee AOGORe noned economist Dr. Vijay Kelkar, whos been the secretary ( crude oil and finance) in the past, has ingeminate verbatim a insularly commissioned report that lobbies for big corporates including Reliance, in his latest report on the hydrocarbon sector c wholeed Roadmap for reduction in present moment dependency in Hydrocarbon sector by 2030. The Kelkar report, submitted to the petroleum ministry in January 2014, has get up verbatim material from an Association of Oil and bluster Operators (AOGO) report. AOGO represents the group of oil and gas explorers which has interest in the Indian hydrocarbon sector, including private as rise as governing body companies. Among its members is Reliance Industries, which is the operator of the controversial KGD6 basin congenital gas block.Dna picked up nine such cut and scatter instances in the Kelkar report, some of which are quoted below.The AOGO, in its report, vouched for having Production Sharing shoot (PSC) authorities for the Indian oil gas sector. The Kelkar Committee, in its report, espouses the recommendation of AOGO.The more or less important Para in the report that justifies the PSC regime in the hydrocarbon sector has been picked from the AOGO report.In Chapter 2.3, the Kelkar Committee report begins with a question, Are foreshortenors incentivized to Gold cuticle in PSC environment?In the following Para, the report justifies the PSC regime by arguing that no company would like to indulge in amber plating as it was not motivator-compatible as every dollar of unfounded expenditure would need to be recovered from the project revenues and which would adversely bear upon cut downor returns. This is from the AOGO report.The report goes on to say the Indian PSC regime was cobwebby and in such a transparent process, any investor who assumes gold plating in his bid would not be able to offer hawkish terms and will not ab-initio not win. Hence there is n o incentive for a profit maximising firm to gold-plate beneath a PSC framework.Kelkar, up to now, justified this. We fetch acknowledged the associations and stakeholders in our report. AOGO and other corporates who have given their presentations are not terrorists that we cannot take up their views in our report, he said.But Kelkar in his acknowledgement doesnt say that hes quoting verbatim from the AOGO report. Instead, it reads The Committee convey AOGO and BCG for manduction with the committee the workings of the detailed Monte Carlo simulation of Indian basins and data related to 1,132 fields respectively. The analysis of the data and the findings are however carried out by the committee itself.Now the question is if Kelkar Committee analysed all data, why did it report verbatim from the AOGO report?The CAG had pulled up the petroleum ministry for pass production sharing contract (PSC) to RIL and losing out revenue as the contract allowed incentive for higher capital expen diture.The CAG report said PSCs between the government and operators were designed to encourage increasing capital expenditure by private contractors, which reduces the governments share.Under the PSC regime, the contractor first recovers his expenditure before sharing profit. This gives an incentive to oil and gas explorers to not control expenditure while growing a block.Most developed nations do not follow the PSC regime and instead choose revenue sharing model. The UPA government is accused of bowed down to RIL pressure and approving a 100% increase in the price of natural gas in the country. 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