Seventh round of bidding for oil, gas blocks to end June 30

June 28th, 2008 - 12:22 am ICT by IANS  

A file-photo of P. Chidambaram

New Delhi, June 27 (IANS) The government Friday said it will stick to the June 30 deadline for receiving bids from domestic and global companies for the award of hydrocarbon assets under the seventh round of auctions. The petroleum and natural gas ministry launched the latest round of bidding in December 2007 and organised six road shows across the world.

The government has put on offer 57 oil and gas blocks - the highest under any New Exploration Licensing Policy (NELP) round - spanning over 171,000 square km. Of these, 19 blocks are in deep water, nine in shallow water and the rest on land. It expects to attract investment between $3.5 billion to $8 billion.

Earlier, the ministry had postponed the deadline twice from the original date of April 11 in a bid to convince the finance ministry to extend tax holiday for natural gas production.

But, it seems to have failed in its effort. In a statement released Friday, Petroleum and Natural Gas Minister Murli Deora said: “As advised by the ministry of finance, income tax holiday will as of now be available for commercial production of crude oil only.”

He urged all exploration and production companies in India and abroad to submit their bids and “join hands with the government in the ever growing success story of India’s oil and gas exploratory activities”.

As per the Income Tax Act, companies producing and refining mineral oil will get 100 percent tax relief on profits for seven years.

But, Finance Minister P. Chidambaram announced that tax holidays would be withdrawn if operations begin after April 1, 2009. Further, the term ‘mineral oil’ does not include natural gas, thereby leading the petroleum ministry to object, apprehending a loss of interest from potential bidders.

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