Petroleum Minister Dharmendra Pradhan on Monday said his Ministry was working towards bringing petroleum under the Goods and Services Tax (GST) as it would benefit the states.
“This (the inclusion of petreoleum in GST) will benefit the states also,” Mr. Pradhan said during an event to mark the signing of the contracts awarded to the successful bidders during the first round of bidding for the discovered small oil and gas fields.
The Minister said he expected oil prices to remain in the $55–$60 range in the near term.
“When oil was at $40 a barrel, then the economic viability of the discovered small fields (DSF) was looked at. Now it is around $50 and the expectation is for it to remain in the $55-60 range in the near term,” he said.
The DSF bid round was unveiled in May 2016. The bid witnessed as many as 134 e-bids for 34 contract areas with 47 companies participating, either singly or in a consortium. Of these, bids were awarded for 31 contract areas to 22 companies.
“The whole process was completed in record time,” said K.D. Tripathy, Secretary, Ministry of Petroleum and Natural Gas. “We are hopeful of rich production from the fields, which will be a step towards meeting India’s ever-growing energy needs.”
According to the Ministry, the cumulative peak production from the awarded fields is expected to be about 15,000 barrels of oil per day and 2 million metric standard cubic metres per day (mmscmd) over their economic life. The estimated total revenue from this would be about ₹46,600 crore of which the Centre’s royalty would be ₹5,000 crore and the states’ royalties ₹2,100 crore.
Online portal
The Petroleum Minister also inaugurated a two-way online portal by the Directorate General of Hydrocarbons developed to facilitate contract management and the redressal of queries.
“The portal will do away with the need for knocking on the doors of government officials to find out the progress of various projects,” Mr.Pradhan said. “That is the commitment of the portal.”
Of the 22 companies awarded the contracts, 17 were from domestic private sector, four public sector companies and one foreign private company.
The Petroleum Ministry was working on the second round of bidding for the remaining contract areas, Mr. Pradhan said.
