Govt relaxes production sharing contracts of pre-NELP and NELP blocks, lowers ONGC burden

The centre allows sharing of levies like royalty and cess in proportion to the participating interest of the contractor in pre-NELP blocks

GN Bureau | July 20, 2018


#ONGC   #PSU   #NELP  

In order to boost domestic production of hydrocarbon resources, the centre has approved the policy framework for streamlining operations of production sharing contracts (PSCs) in pre-NELP (new exploration licensing policy) and NELP blocks.

The policy framework includes special dispensation for exploration & production (E&P) activities in the north eastern region (NER).

Based on recommendations in Hydrocarbon Vision 2030 for the north east, the government has extended timelines for exploration and appraisal period in operational blocks of NE region considering geographical, environmental and logistical challenges. The exploration period has been increased by two years and appraisal period by one year. To stimulate natural gas production in NER, the centre has allowed marketing including pricing freedom for natural gas to be produced from discoveries which are yet to commence production as on July 1, 2018. PSC blocks in NER will be benefited from this decision.

The government has allowed sharing of levies like royalty and cess in proportion to the participating interest of the contractor in pre-NELP exploration blocks, and same has been made cost recoverable with prospective effect. It will benefit pre-NELP exploration blocks in which fresh investment for additional development and production activities is expected as sharing of royalty and cess, and cost recoverability of same will help in making additional investment commercially viable for licensee company; ONGC/Oil India Limited.

The centre has agreed to extend tax benefits under section 42 of Income Tax, 1961 to operational blocks under pre-NELP discovered fields for the extended period of contract under PSC extension policy dated March 28, 2016. The Income Tax provision now allows the firms to claim 100 percent of expenditure incurred under a PSC as tax deductible in the same year. While signing PSC of pre-NELP discovered fields, 13 contracts out of 28 contracts did not have provision for tax benefit. Now, it will bring uniformity and consistency in the PSCs and provide incentive to contractor to make additional investment during the extended period of PSC.

 
 

Comments

 

Other News

India set to enter 5G era

After years of intense preparation, India is about to take the next step in information and communication technology. Prime Minister Narendra Modi will launch 5G services in India on October 1 and also inaugurate the 6th Edition of India Mobile Congress 2022 to be held till October 4, at Pragati Maidan, Ne

Ram Shravan Manan: A musical venture that leads to self-reflection

There is this popular saying that epics are never told, but always retold. Ramayana is one such epic and needs no introduction. Its plot is grounded in sacrifice and the end brings out hope that the good always wins. But how is a centuries-old tale of the prince of Ayodhya still relevant for today’s

Garib Kalyan Ann Yojana extended for three more months

In pursuance of the pro-people announcement made by the prime minister in 2021 and successful implementation of additional food security under PM Garib Kalyan Ann Yojana, the union cabinet has approved its extension for a further period of three months, from October to December 2022. At a ti

A great literary feast (that could’ve been even more sumptuous)

A Case of Indian Marvels: Dazzling Stories from the Country’s Finest Writers Edited by David Davidar Aleph, 390 pages, Rs 999 Change is the only constant, and India has always been doing so. Yet, after independence, if there was a year when the p

Govt e-Marketplace sellers report more business

“My volume of business has increased ever since I registered on GeM (Government e-Marketplace) in 2017. Earlier, I could supply items only in the vicinity of my shop in Fort area and only within Mumbai. Now, I ship my products all over the country! I have tied up with India Post and three private cou

How the Hindi Newspaper Business Changed

The Journey of Hindi Language Journalism in India: From Raj to Swaraj and Beyond By Mrinal Pande Orient BlackSwan, 188 pages, Rs 1,195.00 In India, the English-language media is considered the ‘national media’, while the language press

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter