Shell to re-enter upstream business in India

Shell Plc is mulling to re-enter the upstream business in India, if the government offers a stable policy and open acreage licence to explorers.

The Royal Dutch Shell Plc’s re-entry may boost India’s oil and gas production, which has been stagnant for years.

"We would continue to look at upstream opportunities in India," Harry Brekelmans, projects & technology director and a member of the top executive committee at Shell, told Economic Times, adding, “at the moment, we have not been able to see anything that is attractive enough and will continue to look at how policies develop.”

India’s oil and gas production has been stagnant for years, forcing the country to import nearly 80% of its crude oil requirement. Many power plants are idle or underutilised and the government is making all efforts to lure foreign investors to develop its hydrocarbon reserves.

ET reported that the government is working on a new oil and gas exploration policy that will replace the 16-year-old New Exploration Licensing Policy (NELP), which has guided nine rounds of auction so far.

"We are quite interested in the new policy which suggests that the open acreage licence OLAP (may be offered) and we think that may give us a different opportunity to look," Yasmine Hilton, chairman of Shell Companies in India, told ET.

ET further reported that Shell has no particular preference for the fiscal regime to be followed in exploration and production as the company works across the globe under different contractual terms.

"We can work in any regime as long as there is stability in that regime. Once you enter an agreement, it's a long-term agreement, so you need stability across that, we don't want change over that period," Hilton added.

Shell is bullish on India's gas market and is looking to expand its capacity at Liquefied Natural Gas (LNG) terminal in Hazira, Gujarat.

"We are currently in discussions to expand that further, that's subject to the joint venture itself but we are clearly keen and supportive of these plans," Brekelmans told
ET. The company also has plans to set up a floating LNG terminal at Kakinada, Andhra Pradesh.

(Image: Reuters)