Lok Sabha Question No. 3125 (UNSTARRED), answered on 2016-12-05
Subject: Pending Oil Royalty
Ministry: PETROLEUM AND NATURAL GAS
Asked by: SUSHMITA DEV, HEMANT TUKARAM GODSE

## LOK SABHA UNSTARRED QUESTION NO. 3125 TO BE ANSWERED ON 5/12/2016 Pending Oil Royalty

## 3125.   KUMARI SUSHMITA DEV: SHRI GODSE HEMANT TUKARAM:

## पेट्रोलियमऔरप्राक ृ लिकगैसमंत्री

## Will the Minister of PETROLEUM & NATURAL GAS be pleased to state:

- (a) whether huge amounts of oil royalty are yet to be paid to some States including Assam and Maharashtra;
- (b)  if  so,  the  details  thereof  along  with  the  reasons  therefor  and  the  steps  being  taken  by  the Government in this regard, State/UT-wise;
- (c) the details of latest findings post exploratory drilling in Assam and Arunachal Pradesh; and
- (d) the steps taken to exploit these resources and the technology used therein along with the steps taken to prevent damage to forest cover and possible contamination of ground water?

## ANSWER

पेट्रोलियम और प्राक ृ लिक गैस मंत्रािय में राज्य मंत्री ( प्राार रन्त्िवत्र ( ) प्रााप्र ामेवध ीी )

## MINISTER OF STATE (I/C) IN THE MINISTRY OF PETROLEUM & NATURAL GAS (SHRI DHARMENDRA PRADHAN)

- (a) & (b): At present Oil & Natural Corporation Limited (ONGC), Oil India Limited (OIL) and Private/JV  Companies  are  paying  royalty  to  respective  State  Governments,  in  terms  of  the statutory provisions of Oilfield (Regulation and Development) Act, 1948 (ORDA) and Petroleum & Natural Gas (PNG) Rules, 1959 as amended from time to time, on production of crude oil from their onland fields. The payments of royalty are made regularly.

The State Government of Gujarat filed a Writ Petition in Gujarat High Court demanding royalty on pre-discounted price. The High Court passed an order in the favour of Gujarat Government. ONGC challenged the said order by filing SLP before the Supreme Court of India. The Supreme Court  vide  order  dated  13.02.2014  admitted  the  SLP  of  ONGC  and  an  interim  direction  was issued  to pay royalty to the Government of Gujarat on pre-discounted price of crude oil  with effect from 01.02.2014. Matter is subjudice in Supreme court. ONGC has deposited an amount of Rs.2169 crore for the period from 1.2.2014 to 30.09.2016  towards differential royalty.

The State Government of Assam also filed a Writ Petition in Guwahati High Court demanding royalty from ONGC and OIL on pre-discounted price in terms of the Supreme Court order dated 13.2.2014.  Ministry    of  Petroleum  &  Natural  Gas  vide  letter  dated  15.07.2016  decided  that ONGC and OIL will pay royalty to all similarly placed crude oil producing states at pre-discount price effective from 1.02.2014.  Application filed by Assam Government  was disposed of by the Guwahati  High  Court  with  a  direction  to  ONGC/OIL  to  make  payment  in  terms  of  MoPNG

directive dated 15.07.2016.  Accordingly, ONGC has paid differential royalty of Rs.301 crore to the State Government of Assam and Rs.92 crore to  the state government of  Andhra Pradesh upto  31.3.2016.    OIL  has  paid  differential  royalty  of  Rs.1149.24  crore  and  Rs.2.49  crore  to Assam and Arunachal Pradesh respectively.  As regards the state of Maharashtra,  no oil royalty is due because there is no onland field for oil or gas production.

(c) & (d): ONGC is carrying out exploratory activities in its operated acreages falling in Assam State. During the year (2015-16) ONGC, drilled 8 exploratory wells, out of which 4 wells proved hydrocarbon  bearing  after  completion  of  conventional  testing,  out  of  which  2  wells  were declared discovery  and  ONGC has monetized both the discoveries during the current  year.  In 2016-17, ONGC drilled 6 exploratory wells in Assam.

During the last 2  years,  OIL  has  made  a  total  of  7  discoveries  through  exploratory  drilling  in Assam, out of which 4 are in 2014-15 and 3 are in 2015-16.

Under Production Sharing Contract regime one discovery was made in the year 2008 in the state of Assam.

Companies carry out an Environment Impact Assessment (EIA) study and prepare Environment Management  Plan  (EMP)  for  getting  environment  clearance  before  carrying  out  development drilling  and  other  development  activities  as  per  the  guidelines  of  Ministry  of  Environment, Forests & Climate Change (MoEF&CC) and State Pollution Control Board.

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