Government proposes tax holiday, royalty exemption for oil block auction

摘要

In a bid to attract more global oil majors, the Ministry of Petroleum and Natural Gas has proposed exemption from royalty payment and an income-tax holiday of up to 10 years for the next round of auction of oil and gas exploration blocks. In a draft note to the Cabinet Committee on Economic Affairs (CCEA), the ministry recommended shifting to a revenue-sharing model from the current production sharing contract (PSC) framework, which allows explorers to recover their costs from commercial discoveries before sharing profit with the government.