New Delhi, Oct. 17: Director-general of hydrocarbons R.N. Choubey today said he favoured production-linked payment to the government and wanted the present system of profit sharing under the New Exploration Licensing Policy (Nelp) to be scrapped.
Choubey was speaking at an oil conference here today.
He said the Rangarajan committee would look into the viability of the production-linked payment model for the production-sharing contracts (PSCs). “Let’s see what the Rangarajan Committee will recommend. I do not know. We will have to wait.”
“We have found it too difficult (to manage) the issue of cost recovery. It is difficult to assess the cost recovery and to assess the investment multiples and so on and so forth. We have found it difficult,” he said.
Current PSCs, signed under Nelp 1999, enable explorers to recover all capital and operating costs before sharing the profits with the government.
This system had drawn flak from even the Comptroller and Auditor General (CAG), which said it encouraged firms to goldplate investments.
In May, the government had appointed a committee headed by C. Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, to review the terms of the PSCs and recommend necessary modifications.
The committee, of which the DGH is a member, will submit its report by the end of this month. The committee will also determine the norms for fixing the price of local gas.
The panel may suggest a shift to the production-linked payment regime where explorers may be asked to bid for a percentage of output they will share with the government. The firm offering the maximum will win a block or area.
ATF loading norms
The government has decided to permit domestic private airlines to use jet fuel facilities — such as refuelling terminal and storages — of PSU firms at Calcutta and Chennai airports.
At a meeting convened on September 24 by Pulok Chatterji, principal secretary to the Prime Minister, and attended by oil secretary G.C. Chaturvedi, it was decided that open access will be provided at Chennai and Calcutta airports by March 2013, officials said.
At present, open access to ATF facilities exists at Delhi, Hyderabad and Bangalore airports. In the original plan it was decided that open access would be provided at Chennai, Calcutta, Goa and Mumbai airports by March 2013. However, the target date later got deferred to December 2014/March 2015.
In February, the government had allowed domestic airlines to import jet fuel directly.
However, none of the airlines made much headway in importing the fuel because in most of the airports, ATF supply facilities are owned and operated by oil PSUs, while the land is owned by the airport authority or developer.