OIL, ONGC slump on higher royalty payments

NEW DELHI: Stocks of state-run upstream companies Oil India and ONGC declined up to 5 per cent amid reports that the two companies would be required to share additional burden in the form of royalty payments, with respect from February 2014, amounting in excess of $1 billion. Oil India fell 3.04 per cent to Rs 362. ONGC slipped 4.97 per cent to Rs 219.


Assam will now get crude oil royalty at pre-discounted price similar to Gujarat with effect from February 1, 2014.

"In an order issued by the ministry of petroleum and natural gas, the matter of onshore royalty at pre-discounted prices was examined and based on the interim decision of the Supreme Court dated 13th February, 2014 it was decided that ONGC and Oil India would pay royalty to all similarly placed crude oil producing states, including Assam at pre-discounted prices with effect from 1st February 2014," Assam government said in a release.

This, reports suggested, would mean higher outgo from ONGC and Oil India based on their gross realisation on sale of crude oil to the states and not on the net price.