The production of oil may be behind target, but the Government is confident that the more oil can be produced. It has raised its estimates of oil production for the 9th Plan period. Oil production during the terminal year of the Plan, 2001-02, has now been pegged at around 40 million tonnes as against the earlier target of 37 million, fixed just a few months ago most of this increase is to come from ONGC.

Such is the confidence of the Ministry that the ONGC's target of finding new reserves for the 9th Plan had also been increased by around a third. Though ONGC's track record has been very poor as during the last plan, targets were seldom met.

The Government also allowed private companies to explore oil. The Government signed production contracts for six exploration blocks with various private sector companies including Videocon and the Essar Group. Another 12 such contracts taking the total acreage under this to 50,000 square kms are likely to besigned in July. These blocks were bid over five years ago, and actually awarded close to two years ago.

The Government also said that it would be putting another 47 exploration blocks for bidding under the New Exploration Licensing Policy in August, and this would include those in the deep sea as well. The model petroleum tax code is also expected to be cleared by the Finance Ministry within a month.

Petroleum Minister V K Ramamurthy also announced that he expected additional refining capacity of around 55 to 60 million tonnes to come up during the current plan period. Ramamurthy also spoke of the need to increase India's strategic storage reserves to levels such as those of countries like the US, but declined to comment on what India's reserve levels actually were.

Meanwhile, there is good news on the price front. India's oil import bill will come down to between $ 7 and 7.5 billion this year from about $ 9 billion in 1997-98, due to depressed international crude prices.

As a result, there will be asurplus in the oil pool account this year. India will import about 30 million tonnes of crude and 18 to 22 million tonnes of products in the current financial year to meet domestic requirements.

No issues

The primary markets continue to flounder. There is little hope of companies being able to raise money from individual investors. Only seven companies tapped the market in the first quarter of 1998-99, according to a report.The number has fallen from a high of 1350 in 1995-96 to only 51 in 1997-98. Initial public offers (IPOs) from the manufacturing sector has been even more dismal with the figure falling from 884 in 1995-96 to only 29 in the last fiscal, the report by Prime database, a primary market monitor, said.

The seven companies raised a meagre amount of Rs 124 crore in the first quarter, Prime said adding of these only four were from the manufacturing sector.

In contrast, fund mobilisation through the debt route in the first quarter was a high of 86 per cent of the total mobilisation,similar to 86 per cent in full of last fiscal.

But for the mobilisation by financial institutions and private, public sector banks, the overall picture would have been very dismal, Prime said.According to Prime, public issues of Abhishek Spinfab (Rs 19.86 crore) and Welspun Syntex (Rs 37.60 crore) bombed in the market and the promoters were forced to go through the devolvement route. With allegations of the fresh bout of price rigging in shares, sentiments in the capital markets could remain low for a while.