The Ministry of Petroleum and Natural Gas has liberalised the definition of petroleum to bring more hydrocarbons such as coal bed methane and shale gas under its fold.

According to the gazette notification for the Petroleum and Natural Gas (Amendment) Rules, 2018, petroleum will now mean naturally occurring hydrocarbons, whether in the form of natural gas, in a liquid, viscous or solid form, or a mixture of these. It, however, does not include coal, lignite and helium occurring in association with petroleum or coal or shale, the notification said.

Till now the definition of ‘petroleum’ meant any liquid hydrocarbon or a mixture of hydrocarbons and any inflammable mixture (liquid, viscous or solid) containing a liquid hydrocarbon.

Welcoming the amendment, Great Eastern Energy’s MD and CEO Prashant Modi said it will open up exploration of all hydrocarbons in existing fields, in line with the new Hydrocarbon Exploration Licensing Policy (HELP).

The new HELP allows producers to harness any hydrocarbon resource they find within the assigned area subject to a revenue-share commitment. The earlier definition had excluded shale and other such hydrocarbons, hampering their exploration and production in the country.

“This should help in enhancing domestic exploration and production of hydrocarbons, thereby increasing India’s energy security and reducing our dependence on imports,” said Great Eastern’s Modi. “However, the exclusion of natural gas from the purview of GST remains a deterrent to attracting large-scale investments, as neither the producers nor the consumers are able to set off the taxes paid on their input and output.”

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