Section 3. NATURAL GAS:

(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. (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. (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. 1[(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.] 2Note 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.MumbaiOffshore basin|2.Kutch Basin|2.Bengal-PurneaBasin`| |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<br>Basin|5. Satpura-South Rewa-Damodar Basin| |6. Assam-Arakan Fold Belt||6. Himalayan Foreland| |7. Cambay Basin||7. Chhattisgarh Basin| |||8. NarmadaBasin| |||9. Spiti-Zankar Basin| |||10.DeccanSynecliseBasin| |||11. Cuddapah Basin| |||12. Karewa Basin| |||13.Bhima-Kaladgi Basin| |||14. Bastar Basin| 1. Ins. by GSR 559(E), dated 20 August, 2007 and substituted by S.O. 615(E), dated 28 August, 2009. 3. Definitions. —In this Act, unless there is anything repugnant in the subject or context, — (a) the expressions "lessor" and "lessee" respectively include a licensor and licensee; 9* * * * * 10 [(c) "mineral oils" means any naturally occurring hydrocarbon, whether in the form of natural gas or in a liquid, viscous or solid form, or a mixture thereof, and includes crude oil, natural gas, petroleum, condensate, coal bed methane, oil shale, shale gas, shale oil, tight gas, tight oil, gas hydrate in their usual industrial connotation and other gases occurring in association with mineral oils, but does not include coal, lignite and helium occurring in association with petroleum or coal or shale;] (d) "mining lease" means a lease granted for the purpose of searching for, winning, working, getting, making merchantable, carrying away or disposing of[3] [mineral oils] or for purposes connected therewith, and includes an exploring or a prospecting license[11] [granted before the commencement of the Oilfields (Regulation and Development) Amendment Act, 2025]; (e) "oilfield" means any area where any operation for the purpose of obtaining[12] [mineral oils], refined oil, partially refined oil and any of the products of petroleum in a liquid or solid state, is to be or is being carried on. (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. (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[3. NATURAL GAS: (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. (c) in Category—III Basins: 5.25% (C) In case of deep water blocks; 1. Ins. by S.O. 1597(E), dated 11.4.2019. 2. Subs. by S.O. 367(E), dated 14.1.2019. 3. Ins. by S.O. 1597(E), dated 11.4.2019. 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% (3) Oil Industry Development Cess and Education Cess thereon shall not form part of post well head cost.