RATES OF ROYALTY
1. CRUDE OIL:
(1) PRODUCTION FROM AREAS OUTSIDE NEW EXPLORATION LICENSING POLICY
(NELP) REGIME
A. NOMINATION BLOCKS
(i) from 1.4.1993 to 31.3.1996: @ Rs. 539.20 Per Metric Tonne
(ii) from 1.4.1996 to 31.3.1998: @ Rs. 603.95 Per Metric Tonne
B. PRODUCTION FROM AREAS AWARDED ON NOMINATION BASIS TO NATIONAL
OIL COMPANIES (NOCs), EXPLORATION BLOCKS AWARDED TO PRIVATE/ JOINT
VENTURE CONTRACTORS PRIOR TO NEW EXPLORATION LICENSING POLICY (NELP)
AND ONLAND DISCOVERED FIELDS AWARDED TO PRIVATE/JOINT VENTURE
CONTRACTORS:
(i) from 1.4.1998 to 31.3.2002 : Monthly average rate per Metric Tonne as per Statement
appended;
(ii) With effect from 1.4.2002:
(a) On land areas: @ 20% of Well Head Price
(b) Shallow water offshore areas (upto 400 Mtr water depth): @ 10% of Well Head Price
(c) Deep water offshore areas (> 400 Mtr. Water depth) : @ 5 % of well head price during
first 7 years after commercial production and normal rates as applicable to Shallow water areas
(upto 400 Mtr. Water depth) during other periods.
(d) Heavier Crude Oils of 25° API and less : 2.5% lesser than the applicable rates as above
(e) Reduced rates of royalty, as may be notified by the Government from time to time, will be
levied on production from fields under Enhanced Oil Recovery (EOR)/ Improved Oil Recovery
(IOR).
C. PRODUCTION FROM OFFSHORE DISCOVERED FIELDS AWARDED TO PRIVATE
/JOINT VENTURE CONTRACTORS:
At the rates as specified in respective Production Sharing Contracts (PSCs)
(2) PRODUCTION FROM AREAS UNDER NELP REGIME:
At the rates determined in accordance with the provisions under respective Production Sharing
Contracts (PSCs).
2
[(3) Production from contracts awarded under Bid Round-1 of Discovered Small Field Policy, 2015:]
(a) 3
[12.5 per cent of the value of crude oil receivable from the buyer in respect of
production from on-shore contracts.
(b) 10 per cent of the value of crude oil receivable from the buyers in respect of production
from deep water off-shore (>400 meters water depth) contracts for the first seven years after
commercial production in the contract area and normal rates as applicable to shallow water (up
to 400 meters water depth) contracts during remaining periods.]
1. Ins. by Act 39 of 1969, s. 4 (w.e.f. 1-1-1968).
2. Ins. by S.O. 173(E), dated 15. 01. 2016.
3. Ins. by S.O. 173(E), dated 15.01. 2016.
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1
[(4) Production form contracts awarded under Bid Round-II of Discovered Small Field Policy and
Hydrocarbon Exploration and Licensing Policy (HELP):
(a) for on-land blocks: 12.5%
(b) for shallow water : 7. 5%
(c) for deep water : no royalty shall be payable for the first seven years from the date of
commercial production of crude oil from deep water and shall be payable at 5% thereafter.
(d) for ultra deep water: no royalty shall be payable for the first seven years from the date of
commercial production of crude oil form ultra deep water and shall be payable at 2% thereafter.]
2
[(5) Concessional rates of royalty in case of early commercial production from contract areas
awarded under Hydrocarbon Exploration and Licensing Policy:
For contract areas awarded under Hydrocarbon Exploration and Licensing Policy in respect of bids
invited on or after the coming into force of this paragraph, concessional rates of royalty shall apply if
there is early commencement of commercial production as below:
(A) In case of on-hand blocks:
If commercial production is commenced within four years from the effective date as specified in the
respective contract:
(a) in Category—I Basins: 11.25%
(b) in Category—II Basins: 10%
(c) in Category—III Basins: 8.75%
(B) In case of shallow water blocks;
If commercial production is commenced within four years from the effective date as specified
in the respective contract:
(a) in Category—I Basins: 6.75%
(b) in Category—II Basins: 6%
(c) in Category—III Basins: 5.25%
(C) In case of deep water blocks;
If commercial production is commenced within five years from the effective date as specified
in the respective contract:
No royalty shall be payable for the first seven years from the date of commercial production
and shall be payable thereafter as below:
(a) in Category—I Basins: 4.5%
(b) in Category—II Basins: 4%
(c) in Category—II Basins: 3.5%
(D) In case of ultra deep water blocks:
If commercial production is commenced within five years from the effective date specified in
the respective contract:
No royalty shall be payable for the first seven years from the date of commercial production
and shall be payable thereafter as below:
(a) in Category—I Basins: 1.8%
1. Ins. by S.O. 367(E), dated 14.1.2019.
2. Ins. by S.O. 1597, dated 11.4.2019.
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(b) in Category—II Basins: 1.6%
(c) in Category—III Basins:1.4%.]
2. CASING HEAD CONDENSATE:
(1) PRODUCTION FROM AREAS OUTSIDE NEW EXPLORATION LICENSING POLICY
(NELP) REGIME
A. NOMINATION BLOCKS
(i) from 1.4.1993 to 31.3.1996: @ Rs. 539.20 Per Metric Tonne
(ii) from 1.4.1996 to 31.3.1998: @ Rs. 603.95 Per Metric Tonne
B. PRODUCTION FROM AREAS AWARDED ON NOMINATION BASIS TO NATIONAL OIL
COMPANIES (NOCS), EXPLORATION BLOCKS AWARDED TO PRIVATE/ JOINT VENTURE
(PRIVATE /JOINT VENTURE) CONTRACTORS PRIOR TO NELP AND ONLAND DISCOVERED
FIELDS AWARDED TO PRIVATE/JOINT VENTURE CONTRACTORS:
(i) from 1.4.1998 to 31.3.2002 : Monthly average rate per Metric Tonne as per Statement
appended:
(ii) With effect from 1.4.2002:
(a) On land areas: @ 20% of Well Head Price.
(b) Shallow water offshore areas (upto 400 Mtr water depth): @ 10% of Well Head Price.
(c) Deep water offshore areas (> 400 Mtr. Water depth): @ 5% of well head price during first
7 years after commercial production and normal rates as applicable to Shallow water areas (upto
400 Mtr. Water depth) during other periods.
(d) Reduced rates of royalty, as may be notified by the Government from time to time, will be
levied on production from fields under Enhanced Oil Recovery (EOR)/ Improved Oil Recovery
(IOR).
C. PRODUCTION FROM OFFSHORE DISCOVERED FIELDS AWARDED TO PRIVATE
/JOINT VENTURE CONTRACTORS:
At the rates as specified in respective Production Sharing Contracts (PSCs).
(2) PRODUCTION FROM AREAS UNDER NELP REGIME:
\At the rates determined in accordance with the provisions under respective Production Sharing Contracts
(PSCs).
1
[(3) Production from contracts awarded under Bid Round-II of Discovered Small Field Policy, 2015:]
2
[(a) 12.5 per cent of the value of condensate receivable from the buyer in respect of production
from on-shore contracts.
(b) 10 per cent of the value of condensate receivable from the buyers in respect of production
from off-shore shallow water (up to 400 meters water depth) contracts.
(c) 5 per cent of the value of condensate receivable from the buyers in respect of production from
deep water offshore (>400 meters water depth) contracts for the first seven years after commercial
production in the contract area and normal rates as applicable to shallow water (up to 400 meters
water depth) contracts during remaining periods.]
1. Ins. by S.O. 173 (E), dated 15.1.2016 and further substituted by S.O. 367(E), dated 14.1.2019.
2. Ins. by S.O. 173(E), dated 15.1.2016.
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[(4) In respect of production form contracts awarded under Bid Round-II of Discovered Small Field
Policy and Hydrocarbon Exploration and Licensing Policy (HELP) all the provisions of royalty on crude
oil shall apply mutatis mutandis to condensates.”]
2
[(5) In respect of early commencement of commercial production from contracts areas awarded
under Hydrocarbon Exploration and Licensing Policy in respect of bids invited on or after the coming
into force of this paragraph, all the provisions of concessional rates of royalty applicable for crude oil
shall apply mutatis mutandis to condensates.]
3
[3. NATURAL GAS:
(1) 10% of the value of the natural gas obtained at well-head.
(2) Production of natural gas from contracts awarded under Bid Round-I of Discovered Small Field
Policy, 2015:
(a) 10% of the value of natural gas receivable from the buyer in respect of production from onshore contracts and off-shore shallow water (up to 400 meters water depth) contracts;
(b) 5% of the value of natural gas from the buyers in respect of production from deep water offshore (>400 meters water depth) contracts for the first seven years after commercial production in the
contract area and normal rates as applicable to shallow water (up to 400 meters water depth) contracts
during remaining periods.
(3) Production form contracts awarded under Bid Round-II of Discovered Small Field Policy and
Hydrocarbon Exploration and Licensing Policy (HELP):
(a) for on-land blocks: 10%
(b) for shallow water : 7. 5%
(c) for deep water : no royalty shall be payable for the first seven years from the date of
commercial production of crude oil from deep water and shall be payable at 5% thereafter.
(d) for ultra deep water: no royalty shall be payable for the first seven years from the date of
commercial production of crude oil form ultra deep water and shall be payable at 2% thereafter.
4
[(4) Concessional rates of royalty in case of early commercial production from contract areas
awarded under Hydrocarbon Exploration and Licensing Policy:
For contract areas awarded under Hydrocarbon Exploration and Licensing Policy in respect of bids
invited on or after the coming into force of this paragraph, concessional rates of royalty shall apply if
there is early commencement of commercial production as below:
(A) In case of on-hand blocks:
If commercial production is commenced within four years from the effective date as specified in the
respective contract:
(a) in Category—I Basins: 9%
(b) in Category—II Basins: 8%
(c) in Category—III Basins:7%
(B) In case of shallow water blocks;
If commercial production is commenced within four years from the effective date as specified
in the respective contract:
(a) in Category—I Basins: 6.75%
1. Ins. by S.O. 367(E), dated 14.1.2019.
2. Ins. by S.O. 1597(E), dated 11.4.2019.
3. Subs. by S.O. 367(E), dated 14.1.2019.
4. Ins. by S.O. 1597(E), dated 11.4.2019.
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(b) in Category—II Basins: 6%
(c) in Category—III Basins: 5.25%
(C) In case of deep water blocks;
If commercial production is commenced within five years from the effective date as specified
in the respective contract:
No royalty shall be payable for the first seven years from the date of commercial production
and shall be payable thereafter as below:
(a) in Category—I Basins: 4.5%
(b) in Category—II Basins:4%
(c) in Category—II Basins: 3.5%
(D) In case of ultra deep water blocks:
If commercial production is commenced within five years from the effective date specified in
the respective contract:
No royalty shall be payable for the first seven years from the date of commercial production
and shall be payable thereafter as below:
(a) in Category—I Basins: 1.8%
(b) in Category—II Basins: 1.6%
(c) in Category—III Basins:1.4%
(5) Additional production from existing Administered Price Mechanism field (APM Fields):
The additional production of gas from APM Fields over and above Business as Usual (BAU) scenario
which has been evaluated by third party expert agency and approved by Directorate General of
Hydrocarbons shall be eligible in rates of royalty by ten per cent of the existing applicable rates.]
1
[Note 1: 2
[(1) The well head price of crude oil and casing head condensate for nominated blocks shall be
determined by making the following deductions from the sale price of crude oil and casing head
condensate:
(a) in case of Oil and Natural Gas Corporation Limited.
i. three thousand nine hundred and fifty—five rupees per metric tonne for On share; and
ii. two thousand two hundred and twenty—six rupees per metric tonne for Off shares.
(b) in case of Oil India Limited, two thousand eight hundred and twenty eight rupees per metric
tonne.]
(2) The amounts specified in clause (1) shall be the post-well head cost which shall be valid for a
period of three years with effect from 2
[1st April, 2021] or such period till the revised rates are notified.
(3) Oil Industry Development Cess and Education Cess thereon shall not form part of post well head
cost.
(4) Royalty will be calculated on cum-royalty basis as under:
Royalty amount =
Well head price x royalty rate
(100 + royalty rate).]
Note 2: Since consultations with the concerned State Governments took some time, it has become
necessary to revise the rate of royalty with retrospective effect. The oil producing States stand to benefit
and other States are not likely to be adversely affected.
1. Subs. by GSR. 559(E), dated 20.8.2007.
2. Subs. by S.O. 4382(E), dated 20.10.2021.
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[Note 3: The post well head cost for the purpose of calculating well head price of crude oil or casing
head condensate for cases other than nominated blocks of Oil and Natural Gas Corporation Limited or Oil
India Limited and for natural gas in all cases other than Administered Price Mechanism gas of Oil and
Natural Gas Corporation Limited or Oil India Limited shall be determined as under:
(1) Per unit rate of post well head cost, that is, per metric tonne or barrel for crude oil or casing head
condensate and per Million Metric British Thermal Unit for natural gas shall be determined based on
actual post well head expenditure reported in previous year's audited accounts.
(2) In case of production from a new field under the Production Sharing Contract, the post well head
cost for the first year may be provisionally estimated by the lessee and duly certified by the Directorate
General of Hydro -carbons and final adjustments shall be made within one hundred twenty days from the
end of the first year, based on the audited accounts of the first year.
(3) Oil Industry Development Cess and Education Cess, Depreciation expense, Income Tax,
surcharge thereon and profit petroleum shall not be allowed as expenditure under post well head cost.
(4) Full records shall be maintained and got audited by lesses or procedures to assess the actual post
well head cost incurred in previous year.
2
[(5) Royalty shall be computed on ex-royalty basis :
Provided that for crude oil produced from production sharing contracts signed with private or
joint-venture contractors prior to New Exploration Licensing Policy, royalty shall be computed on
cum-royalty basis.]
3Note 4. For the purposes of the concessional rates of royalty for crude oil, condensates and natural gas,
the categorization of sedimentary basins of India shall be as under:
Category-I Category-II Category-III
1. Krishna-Godavari
Basin
1. Suarashtra Basin 1. Kerala-Konkan Basin
2. Mumbai Offshore
basin
2. Kutch Basin 2. Bengal-Purnea Basin`
3. Assam Shelf Basin 3. Vindhyan Basin 3. Ganga-Punjab Basin
4. Rajasthan Basin 4. Mahanadi Basin 4. Pranhita-Godavari Basin
5. Cauvery Basin 5. Andaman-Nicobar Basin 5. Satpura-South Rewa-Damodar Basin
6. Assam-Arakan Fold
Belt
6. Himalayan Foreland
7. Cambay Basin 7. Chhattisgarh Basin
8. Narmada Basin
9. Spiti-Zankar Basin
10. Deccan Syneclise Basin
11. Cuddapah Basin
12. Karewa Basin
13. Bhima-Kaladgi Basin
14. Bastar Basin
STATEMENT OF MONTHLY AVERAGE RATES OF ROYALTY PAYABLE AS PER METRIC
TONNE ON CRUDE OIL & CASING HEAD CONDENSATE AS MENTIONED AT 1 (1) (B) (i)
ABOVE.
Details of Monthly Royalty Rates
1. Ins. by GSR.559(E), dated 20 August, 2007
2. Ins. by GSR 559(E), dated 20 August, 2007 and substituted by S.O. 615(E), dated 28 August, 2009.
3. Note 4 and Table ins. by S.O. 1597(E), dated 11 August, 2019.
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Month Royalty rates Month Royalty rates
(Rs./MT)
Apr-98 411.31 Apr-00 1055.88
May-98 409.46 May-00 1037.69
Jun-98 414.09 Jun-00 915.75
Jul-98 431.35 Jul-00 1100.28
Aug-98 415.32 Aug-00 1165.03
Sep-98 450.01 Sep-00 1126.65
Oct-98 431.35 Oct-00 1180.45
Nov-98 483.15 Nov-00 1331.69
Dec-98 462.8 Dec-00 1279.89
Jan-99 406.53 Jan-01 1298.23
Feb-99 368.45 Feb-01 973.71
Mar-99 398.67 Mar-01 1009.02
Apr-99 374.77 Apr-01 1104.29
May-99 511.06 May-01 1040.62
Jun-99 569.64 Jun-01 1091.19
01 Jul to 14 JUL-99 569.64 Jul-01 1165.5
15 Jul to 31 JUL-99 580.74 Aug-01 1171.05
Aug-99 602.17 Sep-01 1066.21
Sep-99 706.54 Oct-01 1113.39
Oct-99 769.29 Nov-01 1106.76
Nov-99 858.7 Dec-01 904.03
Dec-99 846.99 Jan-02 808.29
Jan-99 942.11 Feb-02 815.29
Feb-00 958.91 Mar-01 815.77
Mar-00 965.39