Tax glitch: oil hunt roadshows put off
Roadshows planned by the government to promote India’s largest auction of oil and gas blocks under the eighth round of the NELP-VIII have been postponed following investor concern over a lack of clarity on tax breaks on gas production, petroleum ministry officials said.business Updated: Apr 17, 2009 21:18 IST
Roadshows planned by the government to promote India’s largest auction of oil and gas blocks under the eighth round of the New Exploration and Licensing Policy (NELP-VIII) have been postponed following investor concern over a lack of clarity on tax breaks on gas production, petroleum ministry officials said.
The new dates would be worked out after elections, said VK Sibal, director-general of hydrocarbons.
The promotional roadshows for 70 oil and gas blocks offered for bidding under NELP-VIII 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 that the issue be dealt by the new government,” Petroleum Minister Murli Deora said.
The finance ministry had in 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 to crude oil production. This upset oil majors who kept away from the NELP-VII round that closed after the announcement.
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 government had launched NELP-VIII and CBM-IV on April 9 and bids were to close on August 10.
First Published: Apr 17, 2009 21:17 IST