The oil and gas companies in India are faced with an unstable policy regime along with business risks that come out of volatile crude oil prices, global consulting firm Ernst and Young said Thursday, reported Xinhua.
"Instability in policy regime makes the business scenario uncertain for both national oil companies and international oil firms," Anjani K Agrawal, Partner, Oil and Gas Practice of Ernst and Young, told the media.
Ernst and Young has also released a business risk report in this regard.
"A fragmented energy policy creates ambiguity, forcing oil and gas companies to repeatedly make decisions in uncertain environment and deters long-term planning. The policy requires review in order to balance competing goals of security of supply, affordability, meeting demand growth and climate change considerations," Agrawal said.
The 2009 global report is based on interviews with some of the sectors' leading CEOs, analysts, commentators and academics. The report has identified access to reserves as the number one business risk for the oil and gas sector, up from fourth place in 2008.
"Crude oil price volatility is among the largest business risk that oil and gas companies in India face. This is followed by unstable policy regime, managing costs and risks emerging from technological advancements," Agrawal said elaborating the report.
"The overall oil and gas sector has been impacted globally by the economic slowdown, which has created new risks for the industry threatening the near-term survival and prospects of a number of oil and gas companies," he added. Enditem