State wants a bite in Central oil pie

BY V L Srinivasan

Published on Nov 11, 2006

Hyderabad: The Andhra Pradesh Mineral Development Corporation (APMDC) is eyeing the prospects of getting nearly half the cess being collected by the Centre on oil and natural gas being explored in the Krishna Godavari (K-G) basin.

The total cess collected by the Central Government from the oil companies operating in the K-G basin is running into hundreds of crores (Rs 900 crore during 2004-05) and even a part of it will improve the resources of the State Government.

The APMDC officials pointed out that the State Government can also claim its pie from the on-shore drilling carried out by the Centre which is around Rs 100 crore every year. If the Centre concedes the State’s request, the latter would get a substantial amount.

Besides Oil and Natural Gas Corporation (ONGC), the Ministry of Petroleum and Natural Gas has also permitted Reliance and Cairn Energy Limited to explore natural gas and oil in the K G basin.

At a review meeting chaired by Chief Minister Y S Rajasekhara Reddy a few days ago, officials of the APMDC pointed out that Andhra Pradesh can rightfully claim 50 percent of the amount for development of infrastructure in the K-G basin.

Rajasekhara Reddy, however, asked the officials to work out the details and also the justification for making a share. ‘‘The Chief Minister even asked us to work out legal aspects involved in making such a claim,’’ official sources told Express.

When contacted, APMDC vice chairman and managing director V D Rajagopal said that the department was collecting data on the activities of the ONGC and other private firms exploring natural gas and oil. The department would submit its report to the State Government by the end of this month.

According to him, cess is usually collected to develop infrastructure in the villages in the vicinity of K-G basin. ‘‘Infrastructure includes power supply, medical facilities, schools, good roads, protected water supply and measures to check environment pollution in and around the gas wells,’’ he added.