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| Nelp VIII deferred on tax-break concerns |
| Press Trust Of India / New Delhi Apr 18, 2009, 01:19 IST |
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Promotional roadshows were to begin on April 20.
Fearing investor backlash on ambiguity over tax holiday for natural gas, India today deferred roadshows for the largest-ever auction of oil and gas blocks. The new dates would be worked out after the elections.
The promotional roadshows for 70 oil and gas blocks offered for bidding under the eighth edition of New Exploration Licensing Policy (Nelp) and 10 coal bed methane (CBM) areas were to begin on April 20, but the programme has been deferred.
“Concerns had been expressed by several potential bidders on lack of tax holidays for natural gas, similar to the ones given to crude oil production. We could not have got the issue sorted out just now because of elections. So, we decided, let the issue be dealt by the new government,” said Petroleum Minister Murli Deora.
The finance ministry had in the 2008-09 budget scrapped the seven-year tax holiday, or exemption from payment of income tax, on natural gas production. Though oil and gas naturally occurred together and a single well could be producing both, the incentive was restricted only to crude oil production.
The move drew flak from oil majors, who kept away from the previous Nelp VII round that closed after the announcement.
The tax issue will have to be addressed after elections and a new schedule for roadshows and bid closing worked out thereafter, Deora said.
The government had launched Nelp VIII and CBM-IV on April 9 and bids were to close on August 10.
“We were faced with a scenario where we would have completed one phase of roadshows and results of the elections announced. So, we decided to defer the programme,” Deora said.
The first roadshow was to be held in Mumbai on April 20, followed by similar events in Perth (April 27-28), London (May 4-5), Washington (May 11-12) and Calgary (May 14-15).
“The roadshows have been cancelled and new dates will be reworked after (the) elections,” said V S Sibal, Director General of the Directorate General of Hydrocarbons.
Petroleum Secretary R S Pandey said only roadshows have been deferred and the last date of bidding may not necessarily be shifted, as there were enough time for bidders to decide.
India had offered 24 deep-sea blocks, 28 shallow water blocks and 18 onland blocks for bidding in Nelp VIII, hoping to attract $3 billion investment in exploration.
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