New oil and gas rules for upstream companies
On 1st April the Ministry of Petroleum & Natural Gas released an updated set of Petroleum and Natural Gas rules whose highlights include: Increase in security deposits and annual licence fees for petroleum exploration Reduction in penalty amount for late payment of royalty and licence fees Harmonising of NELP, Coal Bed Methane rules in line with the Petroleum and Natural Gas rules Security deposit for grant of exploration licence doubled to Rs1 lakh Security deposit for mining lease doubled to Rs2 lakh In addition the yearly per hectare licence fee which earlier ranged between Rs8 and Rs600 will now range between Rs50 and Rs1, 000 depending upon the number of years.
"These rates were last revised in 1989 and the states have been demanding increases for long." Upstream companies will be happy, as the penalty for late payment of royalty and other dues has been brought down. Earlier, the penalty was 10% per month of the delayed amount.
Now it is the 'prime lending rate' charged by the State Bank of India plus 2%. The new rules came into effect from 1st April.
