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Roadshows for Nelp-8 deferred on tax concerns

Roadshows for Nelp-8 deferred on tax concerns
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First Published: Fri, Apr 17 2009. 11 18 PM IST

 Clarity issues: Union petroleum minister Murli Deora. Pankaj Nangia / Bloomberg
Clarity issues: Union petroleum minister Murli Deora. Pankaj Nangia / Bloomberg
Updated: Fri, Apr 17 2009. 11 18 PM IST
New Delhi: The government has deferred the roadshows starting 20 April to drum up interest on India’s biggest auction ever of 70 oil and gas blocks, as it feared that lack of clarity on taxation would affect participatory interest in the eighth round of New Exploration Licensing Policy (Nelp-8).
Clarity issues: Union petroleum minister Murli Deora. Pankaj Nangia / Bloomberg
New dates would be announced once the elections are over.
Earlier, firms engaged in oil and gas production were eligible for an income tax holiday for seven consecutive years. This was changed in the Union budget of 2008-09, when the finance ministry issued a clarification stating that the tax holiday was only for crude oil production and not natural gas.
“They have been cancelled due to lack of clarity on tax matters. We now plan to complete the process and then go for the roadshows,” said a ministry official who did not wish to be named.
“Concerns had been expressed by several potential bidders on lack of tax holidays for natural gas, similar to the ones given to crude oil production. We could not have got the issue sorted out just now because of elections. So we decided that let the issue be dealt by the new government,” petroleum minister Murli Deora said.
The roadshows were to include presentations on the geological prospectivity of Indian basins, contractual and fiscal frameworks and entailed one-on-one meetings with exploration and production companies and investors.
The global economic downturn notwithstanding, the government has gone ahead and announced the auction, setting a 10 August deadline for explorers to submit bids. It also invited bids from firms for 10 blocks of coal bed methane, a form of natural gas extracted from coal beds and used as a fuel in several industries such as power generation, fertilizers and ceramics. Under the policy, the government?allocates the rights to explore blocks through a bidding process.
The overseas road shows were to be held in Washington (11-12 May) and Houston (7-8 May) in the US, Perth (27-28 April) and Brisbane (29 April) in Australia, London (4-5 May) in the UK and Calgary (14-15 May) in Canada.
(‘PTI’ contributed to the story.)
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First Published: Fri, Apr 17 2009. 11 18 PM IST