he Cabinet relaxed some production sharing contracts of Pre-New Exploration Licensing Policy (Nelp) and Nelp blocks. Companies such as ONGC and Oil India have been given relief on sharing royalty and cess in pre-Nelp exploration blocks.
ONGC’s shares were higher by 3 percent in morning trade after a Cabinet decision on NELP policy and NELP blocks.
The Cabinet relaxed some production sharing contracts of Pre-New Exploration Licensing Policy (Nelp) and Nelp blocks. Companies such as ONGC and Oil India have been given relief on sharing royalty and cess in pre-Nelp exploration blocks.
Further, the Cabinet has also allowed gas producers in the North East to charge market rates as well as extended tax incentives to contractors of old small fields, The Economic Times reported.
“In six pre-NELP exploration blocks, ONGC and OIL had traditionally borne the full burden of royalty and cess, including share of JV partners. But the Cabinet has now allowed the two state firms to bring down their liability to the extent of their respective participating interests in these blocks,” the report added.
These measures will contribute towards ease of doing business in the exploration and production sector and help raise the oil and gas output in the country, oil minister Dharmendra Pradhan said after the Cabinet meeting.
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