Govt. Policies -
The highlights of the Petroleum Policy are outlined below:
Upstream Oil & Gas Sector:
# Procedure for clearances by provincial government and security agencies (ISI, IBI, defense, interior etc.) has been streamlined through a "Green Area Map". No area clearance would be required for concession blocks falling inside the green areas.
# Exploration Blocks are awarded through competitive bidding. This does not apply to Government agreement.
# First 4 years royalty holiday and a lower tax rate of 40% (usual corporate tax is around 49%)
# All applications for exploration licenses are decided within 60 days. Application which are contested may take upto 120 days.
Incentives for local Exploration and Production Companies
# A local E & P company investing with a minimum of 5% working interest during exploration phase will be assigned an additional share out of GOP’s working interest after commercial discovery. In case of a local joint venture this will be divided between the two companies on pro rata basis.
# Local E & P companies will, on a case to case basis, be entitled to receive foreign exchange, during exploration phase, against payment in rupees to meet their daily obligations under permits, licenses and PCA’s