Stepping on the gas!

Accelerated impetus to PNG production…

Cairn India (domestic subsidiary of Edinburgh-based oil explorer Cairn Energy) and State-owned ONGC will jointly invest $4 billion to scale up the production capacity of their oil fields at Barmer in Rajasthan by 25,000 barrels of oil per day (bopd) to 200,000 bopd.

Reliance Petroleum has successfully started production of gas in G-6 Gas Block of Krishna Godavari Basin (KG Basin).

The country’s huge petroleum and natural gas deposits located in its land mass, territorial waters and continental shelf is like a dead asset unless exploited effectively and made accessible for productive purposes. Of course efforts have been on towards this but clearly the potential far exceeds the performance shown thus far.

To give a serious fillip to these efforts, certain concrete steps have been taken:

 The long standing demand for treating production of natural gas at par with mineral oil has been acceded to by the Finance Minister by extending tax holiday to profits from commercial production of natural gas from exploration blocks licensed under New Exploration Licensing Policy (NELP)-VIII.

 India's eighth round of New Exploration Licensing Policy (NELP-VIII) is offering the highest ever number of 70 exploration blocks covering an area of about 1,63,535 Sq. Km.

 Simultaneous offer of 10 blocks has been made under the fourth round of Coal Bed Methane Policy (CBM-IV) for exploration and production of Coal Bed Methane. The blocks offered under CBM-IV cover an area of about 5000 Sq.Km. and are spread over seven States.

However, enlargement of the service tax territorial extent by extending the applicability of Service Tax provisions to installations, structures and vessels in the entire Continental Shelf of India and Exclusive Economic Zones of India, may have an impact on Service Tax liability in case of oil & gas sector.