« Top Headlines » Open DEMAT Account in 24 hrs  Old or new tax regime for TDS on salary? This post-election 2024 event will impact your tax planning  What Are 5 Heads Of Income Tax?  Income Tax Dept releases interim action plan for FY25 on tax collection, refund approvals   Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Income Tax Return: 5 lesser-known tax-saving tips from Section 80  Why you need not rush to file your ITR immediately  Income tax returns: ITR-1, ITR-2, ITR-4 forms for FY 2023-24 available for e-filing  Section 80DDB tax benefits for specified illnesses: 5 things to know  Income tax slabs FY 2024-25: Five tips to help taxpayers decide between old and new income tax regimes  ITR-1, ITR-2, ITR-4 forms for FY 2023-24 (AY 2024-25) available now on e-filing income tax portal  How To Save Tax For Salary Above 15 Lakhs? «  European banks look to US accounting... Creation of concept not liable to sales tax: SC... » Rig shortage may get oil cos tax holiday January, 11th 2008 The government is considering a three-year rig exploration holiday for oil companies digging for hydrocarbons in the country. This is because of the acute shortage of rigs in the international markets. Oil companies have to surrender the blocks if they do not complete the minimum work programme they guaranteed at the time of allotment. However, the riders attached to the holiday are likely to upset exploration firms, especially Reliance Industries (RIL) and ONGC. Firstly, the holiday will be with retrospective effect from January 1, 2007. Secondly, firms seeking rig holiday will have to pay a 100% bank guarantee in lieu of the value of work programme they have committed. The move comes after companies like RIL, ONGC and Italys ENI urged the government to grant a three-year break from drilling exploratory wells. The companies had cited a global shortage of rigs for seeking a time out, a move that could give the company a breather against penalties for falling short of the work target promised to the government. The petroleum secretary M S Srinivasan said: A committee of secretaries will take a decision next week on granting rig exploration holiday for 2-3 years in deepwater blocks. I believe the situation is likely to ease as many rigs are under construction in the international markets. The rig exploration holiday would call for changes in the New Exploration Licensing Policy (Nelp). The contracts signed for the exploration phases of the third and fourth rounds of Nelp may be merged to give the companies breathing space. ONGC chairman and managing director R S Sharma said: Such a holiday is important because rigs are not available even if we are willing to pay higher, as others are willing to pay even more. Rentals have soared beyond $500,000 a day for a deepwater rig. An official from a leading exploration firm operating in the country said: The policy of merging exploration phases to tide over rig shortage does not help since it piles up work commitments in the second and fourth phases, and does not provide respite to the contractor over the long term. Meanwhile, ONGC and RIL are exploring the possibility of sharing rigs to tide over the supply crunch particularly for deepwater drilling units. Both companies are working on mechanisms to share rigs that will meet varying requirements for exploration and development drilling in adjacent blocks. The committee slated to take the decision is chaired by petroleum secretary M S Srinivasan. Other members include economic affairs secretary D Suba Rao, law secretary T K Vishwanathan and directorate general of hydrocarbons (DGH) V K Sibal. Besides rig exploration holiday, the ECS is also likely to consider granting R&D status for Nelp blocks in the Kerala-Konkan region.