High-level panel for reverting to older system of auctioning oil blocks

Two years after the government shifted to revenue sharing contracts for oil and gas block auctions, a high-level panel has suggested reverting back to older system of awarding areas in most basins based on exploration commitment.

The six-member panel, headed by NITI Aayog Vice Chairman Rajiv Kumar, which was formed on directions of Prime Minister Narendra Modi, in its report submitted on January 29 stated that "unexplored areas in Category II & III basins be bid out exclusively based on exploration work programme".

"No revenue or production sharing other than payment of statutory levies (including royalty)" should be the criteria, it said.

"However, in case of windfall gain defined as revenue of more than USD 2.5 billion in a financial year from the block, then 50 per cent sharing of incremental revenue above USD 2.5 billion."