Académique Documents
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Industry
Submitted to:Dr. A.K. Sharma
Contents
LEVEL OF COMPETITION IN
OIL AND GAS INDUSTRY
Level of Competition
Level of competition generally refers
to the life cycle of the Indian
Petroleum and Gas Industry.
Out of four stages, namely initiation,
growth, maturity and stagnation,
Indian Oil and natural Gas Industry is
in its growing phase.
Level of Competition
(Contd.)
FLOW OF FOREIGN
INVESTMENTS
FDI Policy
The present policy on FDI in the Petroleum & Natural
Gas sector vide Press Note No 5 (2008) permits FDI
up to 100% under the automatic route in all
activities other than refining and including market
study and formulation, investment/financing, setting
up infrastructure for marketing in Petroleum and
Natural Gas Sector subject to sectoral policy.
In Refining, FDI up to 49% in case of Public Sector
Undertakings, without involving any divestment or
dilution of domestic equity in existing public sector
undertakings through Foreign Investment Promotion
Board (FIPB) and FDI up to 100% is permitted in case
of Private companies under Automatic route subject
to sectoral policy.
GOVERNMENT POLICIES
AND REGULATIONS
POLICIES AND
REGULATIONS
The Petroleum Act to control issues relating to import,
transport, storage, production, refining and blending of
petroleum was already in place since 1934.
Further, the Oil Fields (Regulation and Development) Act,
1948 and the Petroleum and Natural Gas Rules, 1959
provided regulatory framework for domestic exploration
and production of Oil & Gas.
Hydrocarbon Vision
The Hydrocarbons Vision 2025 lays down the framework
which would guide the policies relating to the
hydrocarbons sector for the next 25 years. Issues such as
E&P, refining, marketing, external policy, oil security,
tariff and pricing, and restructuring and disinvestment are
addressed.
NELP
(New Exploration Licensing
Policy)
Prior to the NELP, the Oil fields (Regulation and Development) Act, 1948
and Petroleum and Natural gas Rules, 1958 regulated the issue of license
and PSU's.
ONGC and OIL were the only public sector companies involved in
exploration and production till 1997 while IOCL was the primary entity
concerned with refining and processing oil after extraction.
Main features include
- Discovery or production bonus by the bidder; income tax holiday for
seven years from the start of commercial production
- No customs duty on imports
- Freedom to the contractor for marketing of oil and gas in the
domestic market of commercial production.
Eight rounds of NELP have been completed till now and the Ninth Round
has recently started in 2010.
Two major discoveries as production by Reliance Industries' (RIL) KG-D6
basin and crude oil production in Barmer (Rajasthan) by Cairn India are
the result of NELP
Regulatory Bodies
Petroleum and Natural Gas Regulatory Board
The Petroleum and Natural Gas Regulatory Board Act,
2006 was enacted in April, 2006. Consequently,
Government has set up in October, 2007, the
Petroleum and Natural Gas Regulatory Board (PNGRB)
to regulate the refining, processing, storage,
transportation, distribution, marketing and sale of
petroleum, petroleum products and natural gas,
excluding production of crude oil and natural gas .
Section 11 and 12 of the PNGRB Act, 2006 states the
functions and powers
The law deals with the acquisition of land for Public purpose.
The Act is a general Act which deals with the procedure and
the conditions under which a land can be acquired.
The only requirement is that the land can only be acquired
for public purpose as per Section 3(f) of the Act.
TAXATION
2006
2007
2008
2009
2010
NA
NA
Oil Development
Cess
Excise and
Customs Duties
Sales Tax
Conclusion
The Indian oil and gas sector is one of the six
core industries in India and has very
significant forward linkages with the entire
economy. Government has taken many steps
to regulate it. The Steps are also taken to
increase the Indigenous oil and gas reserves.
Although there are few loopholes which
should be taken care of as soon as possible,
one major drawback in the E&P sector is that
the Regulatory Body (DGH) does not have
any statutory value. The decisions of the
DGH are merely advisory in nature and the
Government is not to follow them.
References
Ministry of Petroleum and Natural
Gas Website.
Ministry of Trade and Commerce
Website.
Ministry of External Affairs Website.
India Brand Equity Forum (IBEF)
Website.
Wikipedia.
THANK YOU