Latest news with #RSCs
Time of India
4 days ago
- Business
- Time of India
Explained: Why US tariffs have reignited the debate on India's energy dependence
New Delhi: When a trade war makes its way to the fuel pump, the ripple effects can be enormous. The recent 50 per cent tariff on Indian exports announced by US President Donald Trump is not just a headline about geopolitics — it could mean an additional $11 billion a year on India's oil import bill. For a country that imports nearly 90 per cent of its crude oil, the development has put energy security back in the spotlight. Aruna Sharma, Policy Advisor, Development Economist, and former Secretary Steel, Government of India told ETEnergyWorld that the episode is 'a stark reminder of India's persistent energy vulnerability to unpredictable diplomatic shifts and new global political alliances '. India has called the tariffs 'unjust, unfair, and unreasonable', with Prime Minister Narendra Modi reaffirming the push towards energy self-reliance and maximising domestic production. Why is India vulnerable? India's dependence on imported crude means global disruptions — whether political, economic, or security-related — can directly affect domestic fuel prices and supply. Consumption is projected to rise in the coming decades, making the import reliance an ongoing risk. Sharma said that the country must 'rapidly scale up domestic exploration and production' to reduce exposure to such shocks. What policy changes are being suggested? Extending contracts: Oil and gas fields under production sharing contracts (PSCs) nearing expiry risk losing investment unless terms are extended until the economic life of the field. Aligning PSC and RSC terms: Granting PSC operators the same flexibility as revenue sharing contracts (RSCs) could prevent disputes and speed up project execution. Streamlining operations: Self-certification could cut paperwork and accelerate execution by up to 12 months. What about investment and taxation? Capital-intensive deepwater and ultra-deepwater projects need foreign and private investment, but high taxes and royalties — which send 60–70 per cent of producer revenue back to the government — remain a deterrent. Sharma recommended targeted fiscal relief like royalty waivers, tax incentives for marginal fields, and support for enhanced oil recovery. What about GST? Bringing oil and gas under GST would let E&P companies claim input tax credits, lowering costs and improving project viability. What is the key message? Sharma added that the government should see the current crisis as a wake-up call and not allow its energy policy to be dictated by external pressure or global alliances. The country must double down on its domestic production ambitions, with urgency, clarity, and political will.
Mint
12-07-2025
- Business
- Mint
Norms for transfer of participating interest among partners in oil, gas eased
New Delhi: In a move aimed at improving operational flexibility and ease of doing business in India's upstream oil and gas sector, the Union government has approved a long-pending recommendation to allow transfer of participating interest (PI) among existing partners without requiring government consent—as long as there is no change in operatorship. Participating interest means, in respect of each party constituting the contractor, the undivided share expressed as a percentage of such party's participation in the rights and obligations under the contract. Under the current contractual provisions of production sharing contracts (PSC), revenue sharing contracts (RSCs), discovered small fields (DSF) and coal bed methane (CBM), any participating interest or stake transfer within the existing parties requires prior written consent from the government. This move is part of the government's efforts to boost investors' interest and reduce energy import dependency. India aims to explore 2.5 lakh square km in the 10th round of auctions under the Open Acreage Licensing Policy. 'The Management Committee may be empowered to approve Participating Interest transfer cases where the contractor intends to transfer the PI within the existing parties of the contract, subject to no change in operatorship," said the report of the joint working group in April. A letter dated 10 July to the Director General of Hydrocarbons noted that the recommendation has been 'approved." The changes should come into effect at the earliest, as the Directorate General of Hydrocarbons has been asked to take necessary actions based on the ministry's approval. However, no specific timelines were mentioned. Noting that under the existing contractual provisions of all contracts, participating interest transfer within the existing parties of the contractor requires prior written consent from the government, the joint working group in June had recommended: 'However, this process involves a comprehensive technical, financial, and legal due diligence for each case." Expediting approval It added that in such cases, as the participating interest holders have already undergone verification during the contract award stage, evaluation for any change in the participating interest among existing parties of the contract may be foregone. 'Further, in many cases it has been observed that internal transfer approval can take up to six months, leading to significant project delays," the working group had said in its report on issues related to ease of doing business in the Indian upstream sector. The recommendation aims to expedite the approval process and reduce project delays, thereby promoting transparency and ease of doing business. 'PI holders should be required to comply with all the existing conditions of the contract," the recommendations said. Although the transfer of participating interest does not require the government's nod, it would need the signature of a government representative. This move is part of the government's efforts to boost investor interest. Under the 10th round of auction under the Open Acreage Licensing Policy, the government aims to explore 250,000 sq. km and reduce oil import dependence. The Draft Petroleum and Natural Gas Rules, 2025, for which stakeholders need to give their feedback by 17 July, also aim to modernise India's upstream oil and gas framework with several major reforms. Key among them is the introduction of an investor-friendly stabilisation clause, designed to protect lessees from adverse impacts of future legal or fiscal changes, such as increases in taxes, royalties or other levies, by allowing compensation or deductions. The Oilfields (Regulation and Development) Act, 1948, was amended in March 2025, which is also expected to boost investor interest in the oil and gas exploration and production sector. Data sharing in India During his visit to Vienna this week for the 9th Opec International Seminar, the minister for petroleum and natural gas, Hardeep Singh Puri, met several stakeholders in the oil and gas space, including Wael Sawan, chief executive officer (CEO) of Shell; Murray Auchincloss, CEO of bp; and Russel Hardy, Group CEO of Vitol, and spoke of opportunities to invest in the country's oil and gas sector. Among other recommendations, minister Puri approved open sharing of data from the National Data Repository at zero charge to micro, small and medium enterprises (MSMEs), startups and academic institutions. "NDR data may be integrated with the repositories of the National Oil Companies (NOCs), such as ONGC and OIL, and other ministries such as ministry of mines, ministry of coal, ministry of earth sciences, Central Ground Water Board, etc. ensuring seamless access to comprehensive datasets, including seismic, well, and other geological information," the recommendations said. The move aims to promote knowledge sharing, collaborative ventures, and technological advancements through enhanced data accessibility, thereby encouraging innovations in the oil and gas industry.
