Latest news with #DirectorateGeneralofHydrocarbons
Time of India
4 days ago
- Business
- Time of India
Centre approves participating interest transfer among existing oil, gas contractors through management committee nod
New Delhi: The government has approved a key recommendation allowing participating interest (PI) transfer among existing parties in oil and gas contracts through the Management Committee (MC) instead of the current requirement of prior government approval, subject to no change in operatorship. The move applies to Production Sharing Contracts (PSC), Revenue Sharing Contracts (RSC), Discovered Small Fields (DSF), and Coal Bed Methane (CBM) regimes, and is aimed at reducing project delays and easing operations for existing contractors. "Participating Interest (PI) means, in respect of each party constituting the contractor, the undivided share expressed as a percentage of such party's participation in the rights and obligations under the contract." A letter dated July 10 to the Directorate General of Hydrocarbons stated that the recommendation made by the joint working group in June has been 'approved.' The group had proposed that the Management Committee may be empowered to approve PI transfer cases 'where contractor intends to transfer the PI within the existing parties of the contract, subject to no change in operatorship.' The recommendation noted that under current provisions, PI transfer within the existing parties required prior government consent, involving comprehensive technical, financial, and legal due diligence for each case. It stated that since the PI holders have already undergone verification at the contract award stage, such evaluation may be foregone. 'Further, in many cases it has been observed that internal transfer approval can take up to six months of time-period, leading to significant project delays,' the working group on ease of doing business in the Indian upstream sector said. The government has maintained that PI holders will still need to comply with all existing conditions of the contract. The measure comes as part of broader reforms aimed at increasing investor interest and reducing import dependency, with India targeting exploration of 2.5 lakh square kilometres under the 10th round of the Open Acreage Licensing Policy (OALP). As part of its upstream reforms, the Ministry of Petroleum and Natural Gas has also released the Draft Petroleum & Natural Gas Rules, 2025, for public consultation. The draft proposes a stabilisation clause to protect lessees from adverse fiscal or legal changes by allowing compensation or deductions. Stakeholder feedback is invited by July 17. The draft rules also propose mandatory declaration of underutilised pipeline and facility capacity to facilitate third-party access under government oversight. In March 2025, amendments to the Oilfields (Regulation and Development) Act, 1948 were notified to further streamline operations and attract investment in exploration and production. During his visit to Vienna for the 9th OPEC International Seminar earlier this week, Union Minister Hardeep Singh Puri met Shell CEO Wael Sawan, bp CEO Murray Auchincloss, and Vitol Group CEO Russel Hardy, where he highlighted India's push to increase domestic oil and gas production. In another development, the ministry approved open sharing of National Data Repository (NDR) data at zero charge for micro, small and medium enterprises (MSMEs), startups and academic institutions. The joint working group also recommended integrating NDR data with those of ONGC, OIL, Ministry of Mines, Ministry of Coal, Ministry of Earth Sciences, and Central Ground Water Board. The measure is aimed at promoting knowledge sharing and technological development through access to comprehensive datasets, including seismic, well and other geological data.
Time of India
06-05-2025
- Business
- Time of India
Compensation for oil companies if changes in law shave off $5 mn in earnings a year
The government plans to compensate oil and gas explorers in new contracts if a future change in the law reduces their economic benefits by more than $5 million per year by adjusting its royalties, fees or revenue share from an oilfield. The proposed rule is expected to protect explorers from government action such as windfall or retrospective tax and allow for stable economic returns as the Centre seeks to boost investments in exploration. "In the event of a change in law subsequent to the grant of license or lease which results in an increase in costs, or reduction in net after-tax return, or otherwise reduces the economic benefit accruing to the licensee or affected licensee or lessee shall be entitled to be placed in the same financial condition had there been no such change in law," the Directorate General of Hydrocarbons (DGH) said in its proposed petroleum and natural gas rules for the upstream sector. Similarly, if a new law reduces costs or increases returns for the explorer, the government shall increase its levies or revenue or profit share to ensure explorers do not make extra economic gains, it said. The new rules have been proposed following the recent amendment of the Oilfields (Regulation and Development) Act. If a state government changes the law affecting an explorer's return, it will have to increase or decrease its levies to deal with the explorer, as per the proposed rule. But if a law passed by the Parliament affects return, the Centre will adjust its levies or revenue share to stabilise the explorer's economic benefit. Oil and gas explorers, who already face great geological and market risks, have been demanding policy stability to prevent any government move that could end up curbing their returns on investment. India had imposed windfall tax on producers such as ONGC , Oil India and Vedanta after oil prices soared following the Russian invasion of Ukraine in early 2022.
Time of India
06-05-2025
- Business
- Time of India
Compensation for oil companies if changes in law shave off $5 mn in earnings a year
The government plans to compensate oil and gas explorers in new contracts if a future change in the law reduces their economic benefits by more than $5 million per year by adjusting its royalties, fees or revenue share from an oilfield. The proposed rule is expected to protect explorers from government action such as windfall or retrospective tax and allow for stable economic returns as the Centre seeks to boost investments in exploration. "In the event of a change in law subsequent to the grant of license or lease which results in an increase in costs, or reduction in net after-tax return, or otherwise reduces the economic benefit accruing to the licensee or affected licensee or lessee shall be entitled to be placed in the same financial condition had there been no such change in law," the Directorate General of Hydrocarbons (DGH) said in its proposed petroleum and natural gas rules for the upstream sector. Similarly, if a new law reduces costs or increases returns for the explorer, the government shall increase its levies or revenue or profit share to ensure explorers do not make extra economic gains, it said. The new rules have been proposed following the recent amendment of the Oilfields (Regulation and Development) Act. If a state government changes the law affecting an explorer's return, it will have to increase or decrease its levies to deal with the explorer, as per the proposed rule. But if a law passed by the Parliament affects return, the Centre will adjust its levies or revenue share to stabilise the explorer's economic benefit. Oil and gas explorers, who already face great geological and market risks, have been demanding policy stability to prevent any government move that could end up curbing their returns on investment. India had imposed windfall tax on producers such as ONGC , Oil India and Vedanta after oil prices soared following the Russian invasion of Ukraine in early 2022.
Time of India
05-05-2025
- Business
- Time of India
Compensation for oil companies if changes in law shave off $5 mn in earnings a year
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The government plans to compensate oil and gas explorers in new contracts if a future change in the law reduces their economic benefits by more than $5 million per year by adjusting its royalties, fees or revenue share from an proposed rule is expected to protect explorers from government action such as windfall or retrospective tax and allow for stable economic returns as the Centre seeks to boost investments in exploration."In the event of a change in law subsequent to the grant of license or lease which results in an increase in costs, or reduction in net after-tax return, or otherwise reduces the economic benefit accruing to the licensee or affected licensee or lessee shall be entitled to be placed in the same financial condition had there been no such change in law," the Directorate General of Hydrocarbons (DGH) said in its proposed petroleum and natural gas rules for the upstream if a new law reduces costs or increases returns for the explorer, the government shall increase its levies or revenue or profit share to ensure explorers do not make extra economic gains, it new rules have been proposed following the recent amendment of the Oilfields (Regulation and Development) a state government changes the law affecting an explorer's return, it will have to increase or decrease its levies to deal with the explorer, as per the proposed rule. But if a law passed by the Parliament affects return, the Centre will adjust its levies or revenue share to stabilise the explorer's economic and gas explorers, who already face great geological and market risks, have been demanding policy stability to prevent any government move that could end up curbing their returns on had imposed windfall tax on producers such as ONGC Oil India and Vedanta after oil prices soared following the Russian invasion of Ukraine in early 2022.
