Good news on cess for 26 joint venture PSCs

Vol 6, PW 4 (24 Apr 02) Exploration & Production
     

BETTER LATE than never, but not early enough to stop another row brewing over the customs seizure of crude oil tankers serving the Panna, Mukta and Ravva oilfields.

India's law ministry on 12th April finally agreed to issue a clarification that neither British Gas-operated Panna, Mukta or Cairn Energy operated Ravva or a host of other joint venture companies, are liable to pay the extra Rs900 cess on a tonne of crude announced in Yashwant Sinha's budget in February. Shastri Bhawan has prepared a short 'Notification' for publication in the Gazette of India (Extraordinary) Part II, Section 3, sub-section (ii).

It reads: "In exercise of powers conferred by sub section 1 of Section 15 of the Oil Industry (Development) Act 1974 the rate of duty of excise has been specified at the rate of Rs1, 800 per tonne vide notification dated 28th February. As fiscal stability has been guaranteed in various PSCs signed by GoI with various contractors to whom blocks/fields have been awarded, it is clarified that the aforesaid revised rate of duty w.

e.f.

1st March 2002 shall not be applicable to the crude oil production from the fields under the following PSCs, the rate of excise in respect of which shall continue to be specified as Rs900 per tonne." For those who don't know already, the Gazette of India is the rulebook of Indian government policy. Below are the 26 fields whose cess is fixed at Rs900 per tonne.