Lok Sabha Question No. 1160 (UNSTARRED), answered on 2016-05-02
Subject: Marketing Freedom to Oil/Gas Operators
Ministry: PETROLEUM AND NATURAL GAS
Asked by: K. MARAGATHAM, SUKENDER REDDY GUTHA

## GOVERNMENT OF INDIA MINISTRY OF PETROLEUM AND NATURAL GAS

## LOK SABHA UNSTARRED QUESTION NO. 1160 TO BE ANSWERED ON 2 ND  MAY, 2016

## MARKETING FREEDOM TO OIL/GAS OPERATORS

1160:  SHRIMATI K. MARAGATHAM: SHRI GUTHA SUKENDER REDDY:

## पेट्रोलियम एवं प्राक ृ तिक गैस मंत्री

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

- (a) whether the Government proposes to provide marketing freedom to operators in  the  oil  and  natural  gas  fields  and  if  so,  the  details  thereof  along  with  the  likely benefits of the said move;
- (b) the steps taken by the Government to sort out the regulatory mechanism and fiscal issues in this regard;
- (c) whether the Government has fixed/ proposes to fix the prices of natural gas similar to the rates prevalent in gas surplus nations instead of gas deficient nations and if so, the details thereof;
- (d) whether  such  a  move  is  likely  to  discourage  oil  exploration  and  production companies from committing new capital expenditure if so, the details thereof and the steps taken in this regard; and
- (e) whether  the  ONGC  has  requested  the  Government  to  review  the  new  gas pricing formula in KG Basin terning it as non-viable to carry out its discoveries in KG Basin  and  if  so,  the  details  thereof  along  with  the  response  of  the  Government thereto and the steps taken by the Government in this regard?

## ANSWER

## पेट्रोलियम एवं प्राक ृ तिक गैस मंत्रािय में राज्य मंत्री ( स्विंत्र प्रभार ) ( धमेन्द्र प्रधान )

MINISTER OF STATE (INDEPENDENT CHARGE) IN THE  MINISTRY OF PETROLEUM & NATURAL GAS (SHRI DHARMENDRA PRADHAN):

(a)  &  (b) Government  has  approved  marketing  freedom  for  oil  and  gas  to  be produced  from  the  blocks/fields  to  be  offered  under  Hydrocarbon  Exploration  and Licensing Policy (HELP) and Discovered Small Field Policy. The policies are aimed to attract investments and increase production of oil and gas.

(c) & (d) The price of domestically produced natural gas is being determined as per New  Domestic  Natural  Gas  Pricing  Guidelines,  2014  (copy  enclosed).  These guidelines strive to achieve a fine balance between the requirements of producing and consuming sectors.

(e) ONGC along with other operators had requested for review of applicable pricing mechanism for gas produced from its block KG-DWN-98/2. Considering the requests from  the  oil  and  gas  operators  Government  has  decided  to  grant  Marketing (including pricing freedom)  to the  discoveries  made  in  the  Deepwater,  Ultra Deepwater  and  High  Pressure  High  Temperature  areas  which  have  not  gone  on production as on 1.1.2016 and also to the discoveries which are to be made in future in  such  areas.  This  freedom  would  be  subject  to  a  ceiling  price  on  the  basis  of landed  price  of  alternative  fuels.  In  case  of  existing  discoveries  which  are  yet  to commence commercial production as on 1.1.2016, if there is pending arbitration or litigation  filed  by  the  contractors  directly  pertaining  to  gas  pricing  covering  such fields, this policy guideline shall be made applicable only on the conclusion/withdrawal of such arbitration/litigation and attendant legal proceedings.

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