Fillip for states with oilfields

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By The Telegraph Online
  • Published 11.11.13

Hyderabad, Nov. 10 (PTI): The parliamentary standing committee on petroleum and natural gas has said states where oil and gas production takes place should be given at least 50 per cent of the total quantity produced, besides the royalty on natural gas produced from offshore fields.

The recommendations, if accepted, will boost the Andhra Pradesh government’s revenues and economic activity as the state’s coast hosts a major chunk of oil and gasfields.

The committee, which submitted its report last month, has observed that the total gas production during 2012-13 was 40.7 billion cubic metres, of which the share of private/joint ventures in the KG basin located in coastal area adjoining Andhra Pradesh was 13.7 billion cubic metres — 30 per cent of the total natural gas production of the country.

However, the allocation to Andhra Pradesh is pegged at just 29.02 million metric standard cubic metres per day (mmscmd) in 2012-13 of the total allocation of 216.27 mmscmd, which is less than 15 per cent.

The committee said it was an insignificant privilege gain to Andhra Pradesh considering the quantity of gas produced in the state.

Policy relook

The panel said it was of the strong view that the policy should be re-examined and the industries in the states concerned or in the neighbouring regions should get a considerable chunk of the resources.

“The committee, therefore, recommends the MoPNG (ministry of petroleum and natural gas) to supply at least 50 per cent of the gas produced to the industries belonging to the state where the fields are located,” the committee said in its report.

The committee said the cost incurred becasue of the transportation of gas to far off places is causing price escalation.