Executive Summary:
This document contains two notifications from the Ministry of Petroleum and Natural Gas. The first notification, S.O. 172(E), exempts crude oil produced under contracts awarded according to the Marginal Field Policy 2015 from the cess under the Oil Industry Development Act, 1974. The second notification, S.O. 173(E), amends the Oilfields Regulation and Development Act, 1948 to specify royalty rates for petroleum produced under the Marginal Fields Policy 2015. Both notifications are effective as of January 15, 2016.
Key Points / Main Content:
Cess Exemption for Crude Oil:
Crude oil produced under Marginal Field Policy 2015 contracts is exempt from the cess under subsection 1 of section 15 of the Oil Industry Development Act, 1974.
Royalty Rates for Petroleum (Crude Oil, Condensate, and Natural Gas) under Marginal Fields Policy 2015:
Crude Oil:
Onshore contracts: 12.5% of the value of crude oil receivable from the buyer.
Offshore shallow water (up to 400 meters water depth) contracts: 10% of the value of crude oil receivable from the buyer.
Deepwater offshore (over 400 meters water depth) contracts: 5% of the value of crude oil receivable from the buyers for the first seven years after commercial production; normal rates apply to shallow water contracts thereafter.
Casing Head Condensate:
Onshore contracts: 12.5% of the value of condensate receivable from the buyer.
Offshore shallow water (up to 400 meters water depth) contracts: 10% of the value of condensate receivable from the buyers.
Deepwater offshore (over 400 meters water depth) contracts: 5% of the value of condensate receivable from the buyers for the first seven years after commercial production; normal rates apply to shallow water contracts thereafter.
Natural Gas:
Onshore and offshore shallow water (up to 400 meters water depth) contracts: 10% of the value of natural gas receivable from the buyer.
Deepwater offshore (over 400 meters water depth) contracts: 5% of the value of natural gas from the buyers for the first seven years after commercial production; normal rates apply to shallow water contracts thereafter.
Impact Analysis:
Oil and Gas Producers:
Impact: Producers operating under the Marginal Field Policy 2015 will benefit from the cess exemption on crude oil and will be subject to specific royalty rates for crude oil, condensate, and natural gas production.
Action Required: Producers need to factor in the cess exemption and the revised royalty rates into their financial and operational planning.
Central Government:
Impact: The Central Government's revenue from cess on crude oil will be reduced for production under the Marginal Field Policy 2015. The government will receive royalty payments based on the specified rates for petroleum production under the Marginal Field Policy 2015.
Action Required: The government needs to monitor and account for the changes in revenue due to the cess exemption and revised royalty rates.
Buyers of Crude Oil, Condensate and Natural Gas:
Impact: The value of the natural gas, crude oil, and condensate will be impacted based on the cess and royalty rates outlined in the document.
Action Required: Buyers need to factor in the revised royalty rates into their financial and operational planning.
Key Entities Referenced
Oil Industry Development Act, 1974: An Indian legislation that governs the oil industry, as referred to in the notification.
Central Excise Act, 1944: An Indian legislation related to central excise duties, mentioned in conjunction with powers conferred for exemptions.
Marginal Field Policy 2015: A government policy related to the development of marginal oil and gas fields in India. This policy is central to the exemptions and amendments detailed in the notification.
Ministry of Petroleum and Natural Gas: The Indian government ministry responsible for the administration of petroleum and natural gas resources, which issued the notification.
Oilfields Regulation and Development Act, 1948: An Indian legislation pertaining to the regulation and development of oilfields, which is being amended by the notification.
U. P. Singh: Additional Secretary, Ministry of Petroleum and Natural Gas, who is mentioned as the signatory of the notification.
New Delhi: The city in India where the notification was issued by the Ministry of Petroleum and Natural Gas.
Delhi: The city in India where the Controller of Publications publishes documents.
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No. 151] NEW DELHI, TUESDAY, JANUARY 19, 2016/ PAUSA 29 , 1937
पपपप(cid:3)(cid:3)ेे(cid:3)(cid:3)ेे ोोोोििििललललययययमममम औऔऔऔरररर (cid:12)(cid:12)(cid:12)(cid:12)ााााककककृृृृििििततततकककक गगगगससैैससैै मममम(cid:21)(cid:21)ंं(cid:21)(cid:21)ंं ााााललललयययय
अअअअििििधधधधससससचचूूचचूू ननननाााा
नई (cid:4)द(cid:6)ल ी, 15 जनवरी, 2016
ककककाााा.... आआआआ.... 111177772222((((अअअअ))))....————के(cid:11) (cid:12)ीय उ(cid:15)प ाद शु(cid:6)क अिधिनयम, 1944 (1944 का 1) क(cid:20) धारा 5 क क(cid:20) उप-धारा
(1) के साथ प(cid:25)ठत तले उ(cid:28)ोग (िवकास) अिधिनयम, 1974 (1974 का 47) (इसम ! इसका उ(cid:6)ल ेख उ#त अिधिनयम
के $प म! (cid:4)कया गया ह)ै , के(cid:11) (cid:12)ीय सरकार संतु(ट ह ै (cid:4)क साव+जिनक िहत म! ऐसा करना आव0य क ह,ै एतद्1ारा
सीमा(cid:11)त 2े3 नीित 2015 के अनुसार 5दान (cid:4)कए जाने वाली संिवदा7 के तहत उ(cid:15)प ादन (cid:4)कए जाने वाले क8 च े तले
को उ#त अिधिनयम क(cid:20) धारा 15 क(cid:20) उप धारा (1) के अधीन उस पर लगने यो:य उप कर से छूट 5दान करती ह।ै
[फा. सं. ओ-31018/83/2014/ओएनजी- ]
III
यू. पी. >सह, अपर सिचव
MINISTRY OF PERTOLEUM AND NATURAL GAS
NOTIFICATION
New Delhi, the 15th January, 2016
S.O. 172(E).—In exercise of the powers conferred by sub-section (4) of section 15 of the Oil Industry
(Development) Act, 1974 (47 of 1974) (herein referred to as the said Act), read with sub-section (1) of section 5A of the
Central Excise Act, 1944 (1 of 1944), the Central Government being satisfied that it is necessary in the public interest so
to do, hereby exempts crude oil to be produced under the contracts awarded in accordance with the Marginal Field Policy
2015, from the cess leviable thereon under sub-section (1) of section 15, of the said Act.
[F.No. O-31018/83/2014/ONG-III]
U. P. SINGH, Addl. Secy.
279 GI/2016 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
अअअअििििधधधधससससचचूूचचूू ननननाााा
नई (cid:4)द(cid:6)ल ी, 15 जनवरी, 2016
ककककाााा.... आआआआ.... 111177773333((((अअअअ))))....———— तेल 2े3 (िविनयमन और िवकास) अिधिनयम, 1948 (1948 का 53) क(cid:20) धारा 6 क
क(cid:20) उपधारा (4) 1ारा 5दत शि# तय? का 5योग करते @ए के(cid:11)(cid:12) सरकार उन दर?, िजन पर सीमांत 2े3 नीित, 2015
के अनुसार 5दान (cid:4)कए गए संिवदा7 से उ(cid:15)प ा(cid:4)दत पेAोिलयम नामत: क8च ा तेल, कंडेनसेट और 5ाकृितक गैस के
सबं ंध म! रॉय(cid:6) टी दये होगी, को िविनGद( ट करने के िलए उ#त अिधिनयम को आग े संशोिधत करने हते ु एतद्(cid:1)ारा
िनHन िलिखत संशोधन करती ह,ै नामत:
उ#त अिधिनयम क(cid:20) अनुसचू ी म!, -
(i) क8च े तेल से संबंिधत 5िवि( ट 1 के तहत, पैराIाफ 2 के बाद िनHन िलिखत पैराIाफ, शािमल (cid:4)कया जाएगा
नामत:,
‘’सीमांत 2े3 नीित, 2015 के तहत 5दान क(cid:20) गई संिवदा7 से उ(cid:15)प ादन:
(क) अिभतटीय संिवदा7 से उ(cid:15) पादन के सबं ंध म! Lेता से 5ाMय क8च े तेल के मू(cid:6)य का 12.5%।
(ख) अपतटीय उथले समु(cid:12)ी (400 मीटर समु्(cid:12)ी गहराई तक) संिवदा7 से उ(cid:15)प ादन के सबं धं म! Lेता से 5ाM य
क8 च े तेल के मू(cid:6) य का 10%।
(ग) संिवदा 2े3 म ! वािणिPय क उ(cid:15) पादन के बाद पहले 7 वषR के िलए गहरे समु(cid:12)ी अपतटीय (400 मीटर
समु(cid:12)ी गहराई से कम) संिवदा7 से उ(cid:15)प ादन के सबं ंध म! Lेता से 5ाMय क8च े तेल के मू(cid:6)य का 5% और
शेष अविध के दौरान उथले समु(cid:12)ी (400 मीटर तक समु्(cid:12)ी गहराई) संिवदा7 के िलए यथा लाग ू
सामा(cid:11) य दर!’’,
(ii) के>सग हडै कंडेनसेट से सबं ंिधत 5िवि(ट 2 के तहत, पैराIाफ 2 के बाद िनHन िलिखत पैराIाफ, शािमल
(cid:4)कया जाएगा, नामत:
“(3) सीमांत 2े3 नीित, 2015 के तहत 5दान क(cid:20) गई सिं वदा7 से उ(cid:15)प ादन:
(क) अिभतटीय संिवदा7 से उ(cid:15)प ादन के सबं ंध म! Lेता से 5ाMय कंड(cid:11)स ेट के मू(cid:6)य का 12.5 5ितशत।
(ख) अपतटीय उथले समु(cid:12) (400 मीटर क(cid:20) सम(cid:12)ु ी गहराई) संिवदा7 से उ(cid:15)प ादन के सबं ंध म ! Lेता से 5ाM य
कंड(cid:11) सेट के मू(cid:6) य का 10 5ितशत।
(ग) संिवदागत 2े3 म! वािणिPय क उ(cid:15)प ादन के बाद 5थम सात वषR के िलए गहरे समु(cid:12)ी अपतटीय (400
मीटर क(cid:20) कम समु(cid:12)ी गहराई) संिवदा7 से उ(cid:15)प ादन के सबं ंध म ! Lेता से 5ाMय कंड(cid:11)स ेट के मू(cid:6) य का 5
5ितशत और शेष अविध के दौरान उथले समु(cid:12)ी (400 मीटर तक क(cid:20) समु(cid:12)ी गहराई) संिवदा7 के िलए
यथा लाग ू सामा(cid:11) य दर!।
(iii) 5ाकृितक गैस से सबं ंिधत 5िवि(ट 3 के संTय ा “3 (क)” के तौर पर पुन: िनधा+(cid:25)रत (cid:4)कया जाएगा और इस
5कार पुन: िनधा+(cid:25)रत संT या के अनुसार अनु8छ ेद (क) के प0च ात िनHन िलिखत अनु8छ ेद को शािमल (cid:4)कया
जाएगा, नामत:-
“(ख) सीमांत 2े3 नीित, 2015 के तहत 5दान क(cid:20) गई सिं वदा7 से 5ाकृितक गैस का उ(cid:15)प ादन:¹Hkkx IIµ[k.M 3 (ii)º Hkkjr dk jkti=k % vlk/kj.k 3
(क) अिभतटीय संिवदा7 तथा अपतटीय उथले समु(cid:12) (400 मीटर तक क(cid:20) समु(cid:12)ी गहराई) संिवदा7 स े
उ(cid:15) पादन के संबंध म! Lेता से 5ाMय 5ाकृितक गसै के मू(cid:6)य का 10 5ितशत।
(ख) संिवदागत 2े3 म ! वािणिP यक उ(cid:15)प ादन के बाद 5थम सात वषR के िलए गहरे समु(cid:12)ी अपतटीय (400
मीटर क(cid:20) कम समु(cid:12)ी गहराई) संिवदा7 से उ(cid:15)प ादन के सबं ंध म ! Lेता से 5ाMय कंड(cid:11)स ेट के मू(cid:6) य का 5
5ितशत और शेष अविध के दौरान उथले समु(cid:12)ी (400 मीटर तक क(cid:20) समु(cid:12)ी गहराई) संिवदा7 के िलए
यथा लाग ू सामा(cid:11) य दर!।
[फा. स.ं ओ-31018/83/2014/ओएनजी- ]
III
यू. पी. >सह, अपर सिचव
MINISTRY OF PERTOLEUM AND NATURAL GAS
NOTIFICATION
New Delhi, the 15th January, 2016
S.O. 173(E).— In exercise of the powers conferred by sub-section (4) of section 6A of the Oilfields (Regulation
and Development) Act, 1948 (53 of 1948), the Central Government hereby makes the following amendments further to
amend the said Act, to specify the rates at which royalty shall be payable in respect of petroleum, namely crude oil,
condensate and natural gas produced from contracts awarded in accordance with the Marginal Fields Policy, 2015,
namely :-
In the Schedule to the said Act, -
(i) under the entry 1 relating to Crude Oil, after paragraph 2, the following paragraph shall be inserted, namely: -
“Production from contracts awarded under Marginal field policy, 2015:
(a) 12.5 per cent of the value of crude oil receivable from the buyer in respect of production from on-shore
contracts.
(b) 10 per cent of the value of crude oil receivable from the buyer in respect of production from off-shore shallow
water (up to 400 meters water depth) contracts.
(c) 5 per cent of the value of crude oil receivable from the buyers in respect of production from deep water off-
shore(>400 meters water depth) contracts for the first seven years after commercial production in the contract
area and normal rates as applicable to shallow water ( up to 400 meters water depth) contracts during remaining
periods” ;
(ii) under the entry 2 relating to Casing Head Condensate, after paragraph 2, the following paragraph shall be
inserted, namely: -
“(3) Production from contracts awarded under Marginal field policy, 2015:
(a) 12.5 per cent of the value of condensate receivable from the buyer in respect of production from on-shore
contracts.
(b) 10 per cent of the value of condensate receivable from the buyers in respect of production from off-shore
shallow water (up to 400 meters water depth) contracts.
(c) 5 per cent of the value of condensate receivable from the buyers in respect of production from deep water off-
shore (>400 meters water depth) contracts for the first seven years after commercial production in the contract
area and normal rates as applicable to shallow water (up to 400 meters water depth) contracts during remaining
periods”;
(iii) entry 3 relating to Natural Gas shall be re- numbered as “3(a)” and after paragraph (a) as so re-numbered, the
following paragraph shall be inserted, namely : -
“(b) Production of natural gas from contracts awarded under the Marginal Field Policy, 2015:4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
(a) 10 per cent of the value of natural gas receivable from the buyer in respect of production from on-shore
contracts and off-shore shallow water (up to 400 meters water depth) contracts.
(b) 5 per cent of the value of natural gas from the buyers in respect of production from deep water off-shore (>400
meters water depth) contracts for the first seven years after commercial production in the contract area and
normal rates as applicable to shallow water (up to 400 meters water depth) contracts during remaining periods”.
[F.NO. O-31018/83/2014/ONG-III]
U. P. SINGH, Addl. Secy.
Printed by the Manager, Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.