The government has decided to charge $30 per line km for seismic data sold to private oil companies bidding for exploration blocks under the New Exploration Licensing Policy.
This decision was taken at a meeting convened by the petroleum ministry early this week. The meeting was attended by representatives of the Directorate-General of Hydrocarbons, Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL).
Although ONGC and OIL wanted a higher price for the data collected by them, the Directorate-General of Hydrocarbons was of the view that it was essential to keep the price in line with international price for similar data if the country wanted to attract sufficient investment in oil exploration.
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The Directorate-General of Hydrocarbons also prevailed upon the two oil companies to charge the same price for onshore and offshore seismic data that will be sold along with the dockets to the companies bidding under the New Exploration Licensing Policy. Since the dockets will be sold by the Directorate-General of Hydrocarbons, it will deduct reprocessing charges before paying ONGC and OIL for the seismic data.
Fixing the price of seismic data removes one of the major irritants in implementing the New Exploration Licensing Policy. The government has decided to offer 45 exploration blocks in the first round of the policy that will be launched in August. Last month, the ministry had sought states' concurrence for the policy.
That has been plagued by controversies ever since its announcement over a year ago.
The policy, cleared by the Deve Gowda government just before it fell, did not progress much last year because detractors claimed it was a sellout to foreign firms. They have argued that the policy will take away prime acreage from ONGC and OIL.
However, officials argue that under the New Exploration Licensing Policy, both ONGC and OIL will get international prices for new oil finds. Till now, only private exploration companies have been getting international price for their oil.
The policy also allows freedom to sell crude oil and gas in the domestic market and provides for a seven-year tax holiday after commencement of commercial production for blocks in the Northeast. ONGC and OIL will get the same duty concessions on import of capital goods under the new policy as private production sharing contracts.