Executive Summary:
This notification from the Indian Ministry of Petroleum and Natural Gas, effective March 21, 2016, outlines marketing and pricing freedom for gas produced from deepwater, ultra-deepwater, and high pressure-high temperature areas. It applies to discoveries yet to commence commercial production as of January 1, 2016, and to all future discoveries in such areas. The policy is subject to a ceiling price based on the landed price of alternative fuels, calculated every six months.
Key Points / Main Content:
Marketing and Pricing Freedom:
* Producers are allowed marketing freedom, including pricing freedom, subject to a ceiling price.
* This applies to discoveries in deepwater, ultra-deepwater, and high pressure-high temperature areas.
* Applicable to discoveries yet to commence commercial production as of 01.01.2016 and future discoveries.
Ceiling Price Calculation:
* The ceiling is based on the landed price of alternative fuels.
* A simple markup of 5% is applied to the FOB prices of imported fuels to arrive at the landed price if published landed prices are not available.
* Calculation is done every six months, applied prospectively for the next six months, using trailing four quarters data with one quarter lag.
* Ceiling price is the lowest of: Landed price of imported fuel oil, Weighted average import landed price of substitute fuels, and Landed price of imported LNG.
Definitions:
* Landed price of imported fuel oil: Twelve months simple average of daily prices quoted by Platts for Arab Gulf Fuel Oil 180 CST plus a markup of 5%.
* Weighted average import landed price of substitute fuels: 0.3 x landed price of imported coal + 0.4 x landed price of imported fuel oil + 0.3 x landed price of imported naphtha.
* Landed price of imported coal/naphtha: Twelve months simple average of daily prices quoted by Platts for coal/naphtha import plus a markup of 5%.
* Landed price of imported LNG: Twelve months simple average of daily prices quoted by Platts in LNG Daily for West India DES price.
Area Classification:
* Deepwater areas: Water depth between 400 and 1500 meters.
* Ultra-deepwater areas: Water depth greater than 1500 meters.
* High Pressure-High Temperature areas: Shut-in wellhead pressure greater than 690 bars, bottom hole temperature greater than 150 degrees centigrade.
Applicability and Exceptions:
* Guidelines apply to future and existing discoveries yet to commence commercial production as of 01.01.2016.
* Existing discoveries with pending gas pricing arbitration or litigation will be subject to the policy upon conclusion/withdrawal of such legal proceedings.
* Gas fields currently under production will continue to be governed by their existing pricing regime.
Administration:
* The Director General of Petroleum Planning and Analysis Cell (DG, PPAC) will notify periodic revisions of the gas price ceiling.
Impact Analysis:
Producers:
Impact: Greater autonomy in marketing and pricing gas from deepwater, ultra-deepwater, and high pressure-high temperature areas, potentially leading to increased revenue. Subject to ceiling prices.
Action Required: Understand the ceiling price calculation methodology and monitor relevant fuel prices.
Ministry of Petroleum and Natural Gas:
Impact: Responsible for overseeing and administering the new pricing regime.
Action Required: The Director General of Petroleum Planning and Analysis Cell (DG, PPAC) to notify periodic revisions of the gas price ceiling under these guidelines.
Consumers:
Impact: Gas prices will be linked to international fuel prices, potentially leading to price fluctuations.
Action Required: Monitor gas price trends.
Key Entities Referenced
Ministry of Petroleum and Natural Gas: The ministry responsible for the notification regarding marketing and pricing freedom for gas produced from deepwater, ultra-deepwater, and high-pressure/high-temperature areas.
Deepwater, Ultra Deepwater and High PressureHigh Temperature areas: These are specific types of offshore and high-pressure/high-temperature gas exploration and production areas for which the policy notification applies.
Government of India: The governing body that issued the policy regarding gas pricing and marketing freedom.
Platts: A provider of energy and commodities information used as a reference for fuel and LNG pricing in the policy.
LNG Daily: A publication by Platts providing pricing information for Liquefied Natural Gas (LNG).
West India: A geographical location specifying the delivery point for LNG pricing as referenced in the policy.
Director General of Petroleum Planning and Analysis Cell: A unit under the Ministry of Petroleum and Natural Gas responsible for notifying periodic revisions of the gas price ceiling.
U. P. SINGH: The Additional Secretary who approved the notification.
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EXTRAORDINARY
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PART I—Section 1
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PUBLISHED BY AUTHORITY
la- 86] ubZ fnYyh] eaxyokj] ekpZ 22] 2016@pS=k 2] 1938
No. 86] NEW DELHI, TUESDAY, MARCH 22, 2016/ CHAITRA 2, 1938
पे(cid:3)ोिलयम और (cid:12)ाकृितक गैस मं(cid:21)ालय
अिधसूचना
नई िद(cid:6)ल ी, 21 माच(cid:15), 2016
गहरे, अ(cid:29)य िधक गहरे और उ(cid:31)च दबाव-उ(cid:31)च ताप$म वाले %े(cid:21)& म’ खोज& से उ(cid:29)प ािदत क* जाने वाली गैस के िलए मू-य
िनधा.रण क* आजादी सिहत िवपणन।
स.ंओ-22013/27/2012-ओएनजी -डी-V(भाग-II).—भारत सरकार िन(cid:23)न ानसु ार गहरे, अ(cid:29)य िधक गहरे और उ"च दबाव-
उ"च ताप’म वाले ()े * म+ खोज* से उ(cid:29)प ािदत क/ जाने वाली गैस के िलए मू(cid:6)य िनधार(cid:15) ण क/ आजादी सिहत िवपणन को एतद6् ारा
अिधसूिचत करती ह ै:
ए) i) वैकि(cid:6)प क ईधं न* के उतराई मू(cid:6)य के आधार पर अिधकतम मू(cid:6)य क/ शत(cid:15) पर, गहरे समु</अ(cid:29)य िधक गहरे समु</उ"च ताप-उ"च
दाब वाले (े)* म+ सभी खोज*, िजनसे 01.01.2016 स ेवािणि?य क उ(cid:29)प ादन श@ु िकया जाना है और ऐसे (े)* म+ सभी भावी
खोज* के िलए, उ(cid:29)प ादक* को मू(cid:6)य िनधा(cid:15)रण Bव तं)ता सिहत िवपणन Bव तं)ता क/ अनमु ित होगी।
ii) अिधकतम मू(cid:6)य वैकि(cid:6)प क ईधं न* के मू(cid:6)य *, जहां म(cid:6)ू य साव(cid:15)जिनक @प से उपलDध ह,E पर आधाFरत होगा और पFरकलन के
तौर तरीके पारदशH @प से सूिचत िकए जाएंगे। पFरकलन म+ पारदिश(cid:15)ता और सरलता को सिुनिIच त करने के िलए, जहां Jकािशत
उतराई मू(cid:6)य उपलDध नहK होते हE वहा ं उतराई लागत JाLत करने के िलए आयाितत ईधं न* के एफओबी मू(cid:6)य * के िलए 5
Jितशत सामाPय माक(cid:15)-अप लाग ूिकया जाएगा।
iii) उतराई मू(cid:6)य -आधाFरत अिधकतम मू(cid:6)य को छ: माह म+ एक बार पFरकिलत िकया जाएगा और अगले छ: माह के िलए संभािवत
@प से लागू िकया जाएगा। अमरीक/ डालर Jित एमएमबीटीय ूम+ अिधकतम मू(cid:6)य के पFरकलन (जीसीवी) के िलए JयUु त म(cid:6)ू य
डाटा चार ितमाही पीछे का और एक ितमाही आगे का होगा।
iv) अमरीक/ डालर Jित एमएमबीटीय ूम+ अिधकतम मू(cid:6)य (जीसीवी) को इस Jकार पFरकिलत िकया जाएगा, (I) आयाितत ईधं न
तेल का उतराई मू(cid:6)य (II) वैकि(cid:6)प क ईधं न* के भाFरत औसत आयात उतराई मू(cid:6)य (III) आयाितत एलएनजी के उतराई मू(cid:6)य
का Pय नू तम।
1416 GI/2016 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1]
(v) आयाितत ईधं न तेल का उतराई म(cid:6)ू य िन(cid:23)न वत पFरभािषत िकया जाता ह:ै
अरब ग(cid:6)फ ईधं न तेल 180 सीएसटी के िलए Lल ेटस 6ारा उ[त िकए गए दिैनक मू(cid:6)य * का 12 माह का सामाPय औसत जमा
भाड़ा, बीमा आिद के िलए 5 Jितशत का माक(cid:15)-अप।
(vi) वैकि(cid:6)प क ईधं न* का भाFरत औसत आयात उतराई मू(cid:6)य को िन(cid:23)न वत पFरभािषत िकया जाता ह:ै
0.3×आयाितत कोल का उतराई मू(cid:6)य + 0.4× आयाितत तेल ईधं न का उतराई म(cid:6)ू य + 0.3 × आयाितत नाaथा का उतराई
मू(cid:6)य ।
इस उcIे य के िलए, आयाितत कोल का उतराई मू(cid:6)य िन(cid:23)न वत पFरभािषत िकया जाता ह:ै
कोल आयात के िलए Lल ेटस 6ारा उ[त िकए गए दिैनक मू(cid:6)य * का 12 माह का सामाPय औसत।
इस उcIे य के िलए, आयाितत ईधं न तेल का उतराई मू(cid:6)य िन(cid:23)न वत पFरभािषत िकया ह:ै
अरब ग(cid:6)फ ईधं न तेल 180 सीएसटी के िलए Lल ेटस 6ारा उ[त िकए गए दिैनक मू(cid:6)य * का 12 माह का सामाPय औसत जमा
भाड़ा, बीमा आिद के िलए 5 Jितशत का माक(cid:15)-अप।
इस उcIे य के िलए, आयाितत नाaथा का उतराई मू(cid:6)य िन(cid:23)न वत पFरभािषत िकया जाता ह:ै
अरब ग(cid:6)फ नाaथा के िलए Lल ेटस 6ारा उ[त िकए गए दैिनक म(cid:6)ू य * का 12 माह का सामाPय औसत जमा भाड़ा, बीमा आिद के
िलए 5 Jितशत का माक(cid:15)-अप।
(vii) आयाितत एलएनजी का उतराई मू(cid:6)य िन(cid:23)न वत पFरभािषत िकया जाता है:
वेBट इिंडया डीईएस मू(cid:6)य के िलए ‘एलएनजी डेली’ म+ Lल ेटस 6ारा उ[त िकए गए दिैनक मू(cid:6)य * का 12 माह का सामाPय
औसत।
पेfोिलयम और Jाकृितक गैस मं)ालय के तहत पेfोिलयम आयोजना और िवIल ेषण Jकोhठ महा िनदेशक (डीजी, पीपीएसी)
इन िदशा-िनदशj * के अंतग(cid:15)त अिधकतम गैस मू(cid:6)य क/ आविधक समी(ा अिधसूिचत कर+गे।
ख) िवपणन Bव तं)ता उपलDध कराने के िलए इस िवशेष kय वBथ ा के उcेIय से, मू(cid:6)य ाकं न और िवकास कूप* क/ कुल संlय ा का
कम से कम 2/3 ितहाई वाले ()े * म,+ ()े गहरे सम<ु ी/अ(cid:29)य िधक गहरे सम<ु ी/उ"च दाब-उ"च ताप वाले ()े * पर ऐस े()े * से समm JािLत
के िलए िवशेष kय वBथ ा हते ु पा) (े) के तौर पर िवचार िकया जाएगा। वगHकरण िन(cid:23)न Jकार होगा (क) गहरे समु<् ी (े): 400 मीटर और
1500 मीटर के बीच गहराई वाले (े) (ख) अ(cid:29)य िधक गहरे समु<ी (े):1500 मीटर से अिधक गहरे समु<ी (े) (ग) उ"च दाब-उ"च ताप
वाले (े): 690 बारस(cid:15) से अिधक सटइन कूप शीष(cid:15) दाब वाले, 150 िomी सट+ ीmेड से अिधक ताप के बाटम होल वाले ()े । कूप* क/ सlं य ा
पर िवचार करते समय, कूप* क/ संl या को दशमलव के मामले म+ िवगत क/ Pय नू तम सlं य ा तक पूणाpिकत िकया जाएगा और कूप* से
आशय खोज Fरजवा(cid:15)यर (Fरजवा(cid:15)यर*) म+ उप-धरातल भौगोिलक B थल समPव य होगा और जल क/ गहराई उप धरातल भौगोिलक Bथ ल* के
ऊपर लंबवत होगी (वैथी मीटर के अनसु ार)।
ग) JBत ािवत िदशा-िनदशj भावी खोज* और मौजदू ा खोज*, िजनसे िदनाकं 01.01.2016 को वािणि?य क उ(cid:29)प ादन श@ु िकया जाना
है, के िलए लाग ूह*गे। तथािप, मौजूदा खोज,+ िजनसे िदनाकं 01.01.2016 को वािणि?य क उ(cid:29)प ादन श@ु िकया जाना है, यिद ऐस े(े)* को
कवर करने वाले गैस मू(cid:6)य िनधा(cid:15)रण से सीधे तौर पर संबंिधत सिंवदाकार* 6ारा क/ गई माrय Bथ म अथवा यािचका लंिबत होती ह ैतो यह
नीितगत िदशा-िनदशj ऐस ेयािचका/ मrय Bथ म और संबंिधत काननू ी काय(cid:15)वािहय* के िनhक ष(cid:15)/उPह + वापस लेने पर ही लाग ूिकए जाएंगे।
घ) वत(cid:15)मान म+ उ(cid:29)प ादन कर रह ेसभी गैस (े) उसी म(cid:6)ू य िनधार(cid:15) ण kय वBथ ा 6ारा Jशािसत होते रह+गे जो वत(cid:15)मान म+ उनके िलए लाग ू
है।
य.ूपी. िसहं , अपर सिचव¹Hkkx Iµ[k.M 1º Hkkjr dk jkti=k % vlk/kj.k 3
MINISTRY OF PETROLEUM AND NATURAL GAS
NOTIFICATION
New Delhi, the 21st March , 2016
Marketing including pricing freedom for the gas to be produced from Discoveries in Deepwater,
Ultra Deepwater and High Pressure-High Temperature areas.
No. O-22013/27/2012-ONG-D-V(Vol-II) – The Government of India hereby notifies the Marketing including
pricing freedom for the gas to be produced from Discoveries in Deepwater Ultra Deepwater, and High Pressure-High
Temperature areas as hereunder :-
A) i) For all the discoveries in deep water/ultra deep water/high temperature-high pressure areas which are yet to
commence commercial production as on 01.01.2016 and to all future discoveries in such areas, the producers will be
allowed marketing freedom including pricing freedom subject to a ceiling price on the basis of landed price of
alternative fuels.
ii) The ceiling shall be based on the prices of substitute fuels where prices are publicly available, and the method
of calculation shall be communicated transparently. To ensure transparency and simplicity in calculation, a simple
mark-up of 5% shall be applied to the FOB prices of imported fuels to arrive at the landed price where published landed
prices are not available.
iii) The landed price-based ceiling will be calculated once in six months and applied prospectively for the next six
months. The price data used for calculation of ceiling price in US $ per mmbtu (GCV) shall be the trailing four quarters
data with one quarter lag.
iv) The ceiling price in US $ per mmbtu (GCV) shall be calculated as, lowest of the (i) Landed price of imported
fuel oil (ii) Weighted average import landed price of substitute fuels and (iii) Landed price of imported LNG.
v) The landed price of imported fuel oil is defined as:
Twelve months simple average of daily prices quoted by Platts for Arab Gulf Fuel Oil 180 CST plus a mark-
up of 5% towards freight, insurance etc.,
vi) The weighted average import landed price of substitute fuels is defined as follows:
0.3 x landed price of imported coal + 0.4 x landed price of imported fuel oil + 0.3 x landed price of imported
naphtha
For this purpose, the landed price of imported coal is defined as:
Twelve months simple average of daily prices quoted by Platts for coal import.
For this purpose, the landed price of imported fuel oil is defined as:
Twelve months simple average of daily prices quoted by Platts for Arab Gulf Fuel Oil 180 CST plus a mark-up of 5%
towards freight, insurance etc .
For this purpose, the landed price of imported naphtha is defined as:
Twelve months simple average of daily prices quoted by Platts for Arab Gulf Naphtha plus a mark-up of 5% towards
freight, insurance etc..
vii) The landed price of imported LNG is defined as:
Twelve months simple average of daily prices quoted by Platts in ‘LNG Daily’ for West India DES price.
Director General of Petroleum Planning and Analysis Cell (DG, PPAC) under the Ministry of Petroleum and Natural
Gas will notify the periodic revision of gas price ceiling under these guidelines.
B) For the purpose of this special dispensation of providing marketing freedom, fields having at least 2/3rd of the
total number of appraisal and development wells in that field in deep water/ultra deep water/high pressure-high
temperature area shall be considered as eligible for the special dispensation for the entire output from such fields. The
classification will be as (a) Deep water areas: Areas having water depth between 400 meters and 1500 meters (b) Ultra-
Deep water areas: Areas having water depth greater than 1500 meters (c) High Pressure-High Temperature Areas:
Areas having shut-in well head pressure greater than 690 bars, bottom hole temperature greater than 150 degree4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART I—SEC. 1]
centigrade. While considering the number of wells, the number of wells will be rounded off to the previous lower
number of wells in case of decimals and the wells will mean the sub-surface geological location coordinates in the
discovery reservoir(s) and the water depths will be vertically above the sub-surface geological locations (as per
bathymetry).
C) The proposed guidelines would be applicable to future discoveries as well as existing discoveries which are
yet to commence commercial production as on 01.01.2016. However, in case of existing discoveries which are yet to
commence commercial production as on 01.01.2016, if there is pending arbitration or litigation filed by the contractors
directly pertaining to gas pricing covering such fields, this policy guideline shall be made applicable only on the
conclusion/withdrawal of such litigation/ arbitration and the attendant legal proceedings.
D) All gas fields currently under production will continue to be governed by the pricing regime which is currently
applicable to them.
U. P. SINGH, Addl. Secy.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054