OilMin prepares to take Rangarajan report to CCEA: Sources

The oil ministry is getting set to take the Rangarajan report on production sharing contracts and gas pricing to the Cabinet Committee on Economic Affairs (CCEA). The ministry wants the CCEA to take the final call on the new formula submitted by Rangarajan. CNBC-TV18's Nayantara Rai reports.

Sources say Pulok Chaterjee, the principal secretary to the Prime Ministers Office (PMO), as well as the oil secretary GC Chaturvedi have already had conversations as far as this report goes. There are some terms of references on which the oil ministry has accepted.
Rangarajan submitted a new gas price formula that is what the oil ministry wants the CCEA to have a final call on. As per that formula the gas price could be revised to USD 8 a unit. Rangarajan had said that India perhaps is not ready for a fully market aligned gas price at the moment for the next five years. That is something that the oil ministry also agrees with.
There is a new production sharing contact model that had been suggested by Rangarajan, overhauling completely the existing production sharing contract model, saying do away with cost recovery. This point will be deliberated by the CCEA. The 10-year tax break holiday on deep water offshore exploration that is something else the CCEA will be deliberating.
The oil ministry has also accepted Rangarajan’s recommendations that the Comptroller and Auditor General (CAG) is empowered and should be auditing all of those oil and gas blocks in which discoveries have been made. Where discovery has perhaps not been made, a CAG empanelled firm can actually look into all of those.