India's oil ministry has revised exploration rules, scrapping a provision that allowed the government to claim additional economic gains made by oil companies due to changes in law. The move accommodates an industry demand and seeks to attract foreign majors that have largely stayed away from India, where falling output and surging demand have pushed import dependence to 90% of consumption. However, the government has retained the provision that allows companies to compensate themselves - by reducing their payout to the government - if a change in law diminishes their economic benefits. In the previous draft, circulated in May, companies could seek compensation for reduction in economic benefits due to a change in law only if the impact exceeded $5 million. The ministry has now removed this threshold as well, following demands from a few companies. Global energy major ExxonMobil has been demanding protection against expropriation, neutral arbitration, and globally competitive returns that remain intact throughout the contract term. The revised rules address the issue of return stability for the industry, which was rattled by the imposition of a windfall tax on oil producers ONGC, Oil India, and Vedanta after the Ukraine war began in 2022 The draft also permits neutral arbitration for foreign companies. For firms incorporated in India, however, the seat of arbitration will have to be New Delhi. (ICE NEW DELHI)

Fonte notizia: Economic Times