India’s Union Cabinet has approved a policy framework aimed at boosting oil and gas production through enhanced and improved recovery and development of unconventional resources.
The framework includes financial incentives through the partial waiver of taxation or royalties on incremental production.
A government statement said the objective “is to build a supportive ecosystem through academic and research institutes, industry-academia collaboration, and to support and encourage exploration and production contractors to deploy” methods to boost rates of oil and gas recovery.
“The policy envisages systemic assessment of every field for its [enhanced recovery] potential, appraisal of appropriate ER techniques, and fiscal incentives to derisk the cost involved in ER projects to make the investment financially viable,” it said.
The framework calls for creation of an Enhanced Recovery Committee with members from the Ministry of Petroleum & Natural Gas, Directorate General of Hydrocarbons, and experts from industry and academia “to monitor and implement the policy.”
The policy will be effective for 10 years. Fiscal incentives will be available for 120 months from the start of production in ER and unconventional resource projects. In improved recovery projects, starting points for incentives will be dates of achievement for prescribed benchmarks.
