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| ONGC to pay Rs 13,792 cr royalty to govt |
| Press Trust of India / New Delhi Jun 24, 2009, 18:03 IST |
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Oil and Natural Gas Corp (ONGC) will have to pay Rs 13,792 crore in royalty to the government on behalf of Cairn India in the prolific Rajasthan oilfields as the state-run firm has been made liable to pay statutory levies on total production irrespective of its stake.
ONGC has 30 per cent stake in the block RJ-ON-90/1 in Rajasthan but is liable to pay 20 per cent royalty on the entire crude oil produced from the block, a company official said.
Cairn India, which is the operator of the block with 70 per cent stake, does not have to pay any royalty. At $50 per barrel crude oil price, the royalty outgo over the entire life of the field would be Rs 16,209 crore — Rs 4,862.7 crore on its share and Rs 11,346.3 crore on behalf Cairn.
At $60 a barrel oil price total outgo on royalty would rise to Rs 19,703 crore while at $70 per barrel price, it will be Rs 23,196 crore, the official said.
Additionally, ONGC will have to pay Rs 2,500 crore per tonne cess on crude oil. But unlike royalty, the cess liability would be limited to its shareholding.
For its 30 per cent share, ONGC would also pay Rs 3,966 crore in cess, he said. Besides statutory levies, ONGC has to bear 30 per cent of the capital and operating expenditure which comes to Rs 7,349 crore.
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