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Government proposes revenue sharing model for auction of gas fields

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Picture Courtesy:-www.arabianoilandgas.com

New Delhi: The central government on Monday proposed to free domestic natural gas pricing and replace the existing production sharing contract (PSC) system by the revenue-sharing model for all future acreage auctions.

“It is proposed to provide pricing and marketing freedom for the natural gas to be produced from the areas to be awarded under the new contractual and fiscal regime in order to incentivise production from these areas,” the petroleum ministry said on its website, inviting comments from stakeholders on a consultation paper on new fiscal and contractual regime for award of hydrocarbon acreages.

 

In the recently announced marginal field policy, the government has provided pricing and marketing freedom for the natural gas,

In September, the Cabinet Committee on Economic Affairs had approved a landmark change in India’s hydrocarbons exploration regime, sanctioning the auction of 69 small and marginal oil fields of state-owned ONGC and Oil India Ltd. to private and foreign firms.

“For the first time, a revenue-sharing model is being approved in place of production-sharing contract,” Petroleum Minister Dharmendra Pradhan had told reporters here.

The government of India has been reviewing policies from time to time for exploration activity and investment there in. Over the years, there has been a shift in the E&P (exploration and production) policy, from nomination acreage to competitive bidding,

The ministry proposed a Uniform Licensing Policy that will allow exploitation of all forms of hydrocarbons – oil and gas as well as shale oil and gas and coal-bed methane under one permit.

It also proposed Open Acreage Licensing Policy (OALP) allowing companies to choose the area for exploration rather than government identifying blocks and offering them in bid rounds.

Further, it proposed a revenue sharing model in place of the present fiscal system of production sharing based on Pre-Tax Investment Multiple (PTIM) and cost recovery.

Under the proposed regime companies offering the maximum revenue share or percentage of oil and gas to the government, and committing to do more work, will win the field.

As per current practice, companies get blocks by bidding the maximum work programme and recover all their investment before sharing profits with the government.

“In this model it is proposed that the bidders will bid the percentage of revenue that they will share with the government against two revenue scenarios — when revenue is less than or equal to the Lower Revenue point and when revenue is more than or equal to Higher Revenue point,” the paper said.

“The percentage government revenue share at revenue points falling between the lower and higher revenue points will be interpolated on a linear scale. Revenue, net of royalty (as applicable) will be shared between the contractor and the central government based on revenue accrued for oil and gas on a monthly basis,” it added.

(Inputs from IANS)

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Rahul Gandhi Points at PM Modi to Vacate the Seat over Gas price Hike

Rahul Gandhi's twitter attack on PM Modi: Vacant your seat over the gas price hike.

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Rahul Gandhi's verbal attack on PM Modi
Rahul Gandhi's verbal attack on PM Modi wikimedia commons

NEW DELHI: Congress Vice President Rahul Gandhi on Sunday attacked the Narendra Modi-led central government after the prices of cooking gas was again hiked, asking him to “vacate the ‘Sinhasan’ (post of the Prime Minister)”.

“Mehangi gas, mehanga rashan. Band karo khokala bhashan. Dam bandho kam do. Warna khali karo sinhasan (Expensive gas, expensive ration. Stop making hollow promises. Fix the rates and give employment or else vacate the post),” Rahul Gandhi tweeted attaching a news report of the hike.

Gandhi was referring to the price hike announced by the state-run oil firms on Wednesday.

The prices of the LPG cylinder’s went up by Rs 4.50, while the non-subsidised rates were hiked by a steeper Rs 93 per cylinder.(IANS)

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India Looks at Strategic Partnership with Oil Producers

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Prime Minister Narendra Modi
Prime Minister Narendra Modi at his three-hour long meeting here with chief executives of top global and Indian companies. ians

New Delhi, Oct 9: India is looking to upgrade its relationship with producing countries to a strategic one, instead of mere buyer-seller, Petroleum Minister Dharmendra Pradhan said on Monday.

This was the message of Prime Minister Narendra Modi at his three-hour long meeting here with chief executives of top global and Indian companies, including British major BP, Russia’s Rosneft, Saudi Aramco and Reliance Industries, on ways to revive investment in oil and gas exploration and production.

“The Prime Minister laid out to leading companies like BP, Shell, Rosneft, Exxon Mobil as to what should be the energy economy of India,” Pradhan told reporters here on the sidelines of the CERAWEEK India Energy Forum organised by IHS Markit.

“The Prime Minister emphasised the need to move the engagement to a strategic partnership, going beyond the buyer-seller relationship,” he said, adding that “all major producers, Saudi Arabia, Russia, the US, all have recognised the massive scale of India’s energy engagement”.

According to a statement, from the Prime Minister’s Office, Modi said there is a need to develop energy infrastructure and provide access to energy in eastern India as the status of the energy sector in India was highly uneven.

CEOs and top officials from Rosneft, BP, Reliance, Saudi Aramco, Exxon Mobil, Royal Dutch Shell, Vedanta, Wood MacKenzie, IHS Markit, Schlumberger, Halliburton, Xcoal, ONGC, IndianOil, GAIL, Petronet LNG, Oil India, HPCL, Delonex Energy, NIPFP, International Gas Union, World Bank, and International Energy Agency were present at the meeting.

Pradhan, Power Minister R.K. Singh, and senior officials from NITI Aayog and Prime Minister’s Office, as well as the Petroleum and Finance Ministries were also present in the meeting.

Addressing the conference, Pradhan said that with India now being well integrated into the global oil economy, she was naturally impacted by geopolitical developments.

“Recently, when retail fuel prices went up in India, there was a hue and cry in the street,” he said of the time last month when petrol prices in Mumbai went over Rs 79 a litre due to a rise in international rates.

“We therefore need to know and keep abreast of what is happening in the industry worldwide… about OPEC and output cuts, about Russia, shale in the US, trends in LNG market,” he added.

As proof of the upgraded energy relationship with Saudi Arabia, Pradhan noted the opening of Saudi state-run oil giant Aramco’s India office in Gurugram on Sunday that was jointly inaugurated by him and Aramco CEO Amin Nasser.

“Aramco investment in India will increase..they are in talks with possible partners here,” Pradhan said.

Saudi Aramco, which established its business presence in India last year, has formed an Indian subsidiry that will engage in crude oil and LPG marketing, engineering and technical services, and other business development activities.

“Aramco India intends to partner with Indian companies and set up integrated business ventures in the hydrocarbon value chain in India,” the Petroleum Ministry said.

According to the PMO, Modi thanked Russian President Vladimir Putin, and Rosneft, for their commitments and support to the energy sector in India. He also appreciated the 2030 vision document of the Kingdom of Saudi Arabia.(IANS)

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Jammu Engineer Rahul Jarngal scales Mount Everest

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Rahul Jarngal along with three other members of an ONGC team scaled the world’s highest peak.

Jammu, May 29, 2017: Rahul Jarngal, an engineer belonging to Jammu and Kashmir’s Kathua district, has scaled the Mount Everest.

Jarngal belongs to the border village of Gurabeldaran in Hira Nagar and is an engineer with the Oil and Natural Gas Corporation Ltd (ONGC).

NewsGram brings to you latest new stories in India.

On May 27, he along with three other members of an ONGC team scaled the world’s highest peak (8,848 ft) under the guidance of Loveraj Singh of the Border Security Force.

Singh represents the Indian Mountaineering Federation.

The expedition was flagged off by Minister of State for Petroleum and Natural Gas Dharmendra Pradhan on March 27.

The team had left Kathmandu for the summit on April 4, sources said.

(IANS)