Cairn and its partner Oil and Natural Gas Corp (ONGC) have written to the government seeking relief on levy of cess citing the production sharing contract (PSC) for Rajasthan field which is silent on such a levy and does no specify any rate.
8Cairn had also initiated an arbitration against the levy but had to drop it as part of the conditions laid down by the government for approving takeover by Vedanta Group.
8The company has pointed out that a cess is applicable only on pre-NELP blocks. And even there the rate is fixed at Rs 900 per tonne on 26 blocks awarded prior to 1999. Only in case of Rajasthan is the cess levied at Rs 4,500 per tonne.
8While the cess had in the past been linked to prevailing crude oil prices when it has hiked, the same principle should be applied when rates have fallen to make a balance.
8On a rough estimation Cairn has completed 300 million barrels production in six years and has contributed over Rs 60,000 crore to the exchequer.
8The current cess leived has become a burden for producers after international oil prices halves around at 50 per barrel.
For more details visit indianpetroplus.com
8Cairn had also initiated an arbitration against the levy but had to drop it as part of the conditions laid down by the government for approving takeover by Vedanta Group.
8The company has pointed out that a cess is applicable only on pre-NELP blocks. And even there the rate is fixed at Rs 900 per tonne on 26 blocks awarded prior to 1999. Only in case of Rajasthan is the cess levied at Rs 4,500 per tonne.
8While the cess had in the past been linked to prevailing crude oil prices when it has hiked, the same principle should be applied when rates have fallen to make a balance.
8On a rough estimation Cairn has completed 300 million barrels production in six years and has contributed over Rs 60,000 crore to the exchequer.
8The current cess leived has become a burden for producers after international oil prices halves around at 50 per barrel.
For more details visit indianpetroplus.com
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