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Agenda
Proposed Amendments to Act/Rules - 6 Nos. Proposed Additions to Act/Rules - 3 Nos. Other Linked Recommendations - 3 Nos.
Royalty calculation
Current Position The Act and Rules recognize non-payment of Royalty on oil/gas/casing head condensate/CBM/Gas hydrate unavoidably lost during production only whereas the loss in handling not covered under existing provisions. Suggestion: No royalty should be payable on the quantity of crude oil, casing head condensate, natural gas, coal bed methane or gas obtained from gas hydrates which is lost during transportation or processing till the 'Delivery Point'.
Disparity in royalty rates for crude oil from onshore nominated blocks
Current Position: Under Govt's new scheme effective April 1, 2002, royalty on crude oil from onshore nominated blocks to be paid @20% of the wellhead value till 2006-07. Thereafter, royalty to gradually taper to reach 12.5% in the year 2011-12. No action taken till now. Suggestion: To gradually taper the royalty rates for crude oil produced from onshore nominated blocks, as decided earlier by the Government under the new scheme of royalty.' Rates to converge with royalty rate as applicable to NELP blocks. Schedule to the Act be amended.
Royalty in kind:
Current Position: First Proviso to Rule 14(1)(a) provides for the Government to take royalty in kind (in petroleum and natural gas). Suggestion: It will be difficult in practice because of varying wellhead values, evacuation facilities, marketing process and valuation. Hence it is suggested to delete this Proviso.
Suggestion:
Definitions
1. 'Mineral Oils' include natural gas and petroleum 2. 'Petroleum' means naturally occurring hydrocarbons in a free state, whether in the form of natural gas or in a liquid, viscous or solid form, but does not include helium occurring in association with petroleum, or coal, or shale, or any substance which may be extracted from coal, shale, or other rock by the application! of heat or by a chemical process. 3. 'Natural gas' or 'gas' means gas obtained from bore-holes and consisting primarily of hydrocarbons but does not include helium occurring in association with such hydrocarbons. 4. 'Coal bed methane' means natural gas obtained from bore holes occurring in coal or lignite seams and consisting primarily of hydrocarbons. 5. 'Gas hydrates' means naturally occurring solids composed of water molecules forming a rigid lattice of cages each containing a molecule of natural gas.