BG opposes govt decision on profit gas

British firm BG group has expressed opposition to the government move to take its share of production from gas fields in kind saying it will distort the level playing field and give unfair advantage to Gail (India).

"The right of government to take profit gas in kind is erroneous as it will restrict the marketing rights of contractors and result in them being unable to commit definite volumes to customers," the company, which owns 30% stake in Panna-Mukta and Tapti oil and gas fields off Mumbai, said in its annual review report.

The government has a right to a certain percentage of oil and gas produced from domestic fields. Till now, the government was taking its share in cash (the value of its share) but is now planning to take the same from gas fields in kind (as natural gas). It is also planning to give its share of gas to Gail.

Nigel Shaw, CEO of BG India, at an industry interaction with petroleum minister Mani Shankar Aiyar last week, had stated that taking government's share of profit from gas fields in kind would make marketing of gas difficult as "the amount of profit gas in mature fields can be almost 90%."

He also said this would give unfair advantage to the incumbent (Gail) and distort the level playing field.