NEW DELHI: An excerpt from ‘The Gist‘ episode with Vikram Singh Mehta, Chairman & Distinguished Fellow at the Centre for Social and Economic Progress (CSEP), Editor, ‘The Next Stop: Natural Gas and India’s Journey to a Clean Energy Future’ and Former Chairman of the Shell Group of Companies In India in conversation with StratNews Global Associate Editor Amitabh P. Revi.
Watch the complete conversation here: https://www.youtube.com/watch?v=LCLBMSsgstI&t=623s
The value of those assets will be hugely eroded. We have a 26% stake in an oilfield. We have a 20% stake in the Sakhalin oil and LNG complex and I understand that we have a few other smaller, lesser value assets. Now, let’s take Sakhalin. Exxon is the other private sector partner in that complex and Exxon has walked away from that asset. They have, in a way impaired that asset just like BP walked away from its 20% shareholding in Rosneft and will take an impairment of $25 billion. Those assets, shareholdings are up for sale and clearly, at one level, the value of our shareholding in those assets will come down. At another level of course, it offers an opportunity to buy the assets of companies that have walked away like Exxon, BP or Shell. We face a moral dilemma. It would be wrong for us to exploit or leverage this opportunity because it would be unprincipled. It’s opportunistic and I would not recommend that the government look to acquiring the assets of Exxon, BP or Chevron at say 10,15,20 cents on the dollar. That would be wrong, unprincipled On the other hand, when it comes to the acquisition of crude oil, at the moment, we have to look at it if for some reason, Russian oil and gas is removed from the market, the price of crude oil could go well beyond $150 bpd. The misery that people are facing around the world today will get compounded. So, it is important that Russian oil remains in the marketplace and that it has a market. So, I am not going to suggest imposing the same moral constraint on the purchase of discounted or cheap Russian oil. What I will say, however, in sort of final remarks is at a time like this, all of us whether we’re in decision making positions, chiefs of oil companies or in government, we have to essentially ask ourselves the question, is there a trade off between profits and principles? To an extent. It’s often difficult to afford principles if you don’t make profits. But I’m pretty clear that if you breach principles, if you compromise your principles, then you don’t deserve profits. So, I would very much hope that the Government of India and the oil companies will walk a very fine line and not look to leverage the opportunities that have been created because of a geopolitical crisis and look to make short term profits. on that account.
I think there’s going to be a lot of press commentary. There’s going to be editorials against India. We have a logic for buying Russian crude. We will have difficulty explaining to the world why we bought Russian assets. Alright. Let’s make sure that what we do we do on the basis of very clearly enunciated principles. And let’s not be afraid of brickbats because no one in the West can afford to throw stones at us because they themselves have actually been pretty ambivalent about their principles.