Cabinet clears extension of oil, gas production pacts signed before 19993 min read . Updated: 23 Mar 2017, 08:08 AM IST
Companies, however, have to pay a higher share of profits to the government during the extension period
New Delhi: The government on Wednesday cleared a policy for extending the term of more than two dozen oil and gas production contracts signed prior to 1999 in a bid to bolster energy security. The move is expected to fetch an additional investment of about $5.43 billion.
One of the beneficiaries of the decision is Cairn India Ltd’s block in Barmer, Rajasthan—RJ-ON-90/1—the contract for which expires in May 2020.
An official statement issued after the meeting of the cabinet committee on economic affairs said the policy will enable contractors to extract additional reserves using new technologies. The recoverable reserve from these blocks is estimated to be more than 426 million barrel of oil equivalent. In 2016-17, up to February 2017, production from these blocks was around 55 million barrels of oil and 965 million cubic meters of natural gas.
Companies, however, have to pay a higher share of profits to the government during the extension period. “The government’s share of profit petroleum during the extended period of contract would be 10% higher for these fields, thus bringing additional revenues," said the statement.
It added that the extension for Rajasthan oil blocks was a major stepping stone in sustaining and enhancing onshore production. The 25-year lease for Cairn’s block in Barmer provides for a mutually agreed 10-year extension if gas is being produced commercially. Commercial production of gas from the field commenced in 2013. Mint had reported on 25 October that the government was preparing a policy for extending these contracts.
In another decision, aimed at improving the quality of elementary education and ensuring that teachers acquire minimum qualifications, the cabinet approved an amendment to the Right of Children to Free and Compulsory Education (RTE) Act, 2009.
According to the official statement, the amendment will enable the in-service untrained elementary teachers to complete their training and ensure they have a certain minimum standard of qualification.
Further, the cabinet committee on economic affairs also cleared a 400km border road from Mizoram to Meghalaya at an estimated cost of Rs6,721 crore, to be taken up in 2017-18. Out of the sanctioned 403km, approximately 52km will be in Meghalaya and 351km in Mizoram.
At the same meeting, the cabinet was informed of the signing of the memorandum of understanding between the Indian Computer Emergency Response Team under the ministry of electronics and information technology and the US homeland security department with regard to cooperation in the field of cyber security. The agreement was signed on 11 January in New Delhi.
The cabinet changed the funding pattern of the Rs10,000 crore fund of funds for start-ups by allowing the venture capital funds to invest only twice the amount contributed by the government from four times stipulated earlier.
The cabinet also approved fresh estimates for the project Deepening and Widening of Mumbai Harbour Channel and JN Port Channel (Phase-II) costing Rs2,029 crore. It will be funded through internal resources of JN Port Trust with market borrowing, if necessary.
The cabinet also approved an increase in the minimum support price (MSP) of milling copra for the 2017 season by Rs550 per quintal to Rs6,500. The MSP of ball copra has been increased to Rs6,785 per quintal for 2017 season from Rs6,240 last year. The government has decided to ramp up investment in coconut cultivation and thereby improve its productivity in the country, said an official statement.
In another decision, the cabinet approved amendments to the National Bank For Agriculture & Rural Development or NABARD Act, 1981. These include provisions related to the increase of authorized capital of NABARD from Rs5,000 crore to Rs30,000 crore and also changes in the titles and sections of the Act.
Further, to facilitate implementation of GST regime, the cabinet approved the amendment of the Customs and Excise Act, relating to abolition of cesses and surcharges on various goods and services.
Komal Gupta and Asit Ranjan Mishra contributed to this story.