Oil: Tax holidays and cutting royalty payments a good idea

Given the dramatically lowered interest in bidding for gas/oil blocks in every NELP round—from 52 blocks in NELP VI in 2006, just 41, 32 and 14 blocks were awarded in the next three rounds—the government has done well to do what it can to augment interest. Part of this has been taken care of by putting in the kitty the areas relinquished by both Cairn and RIL as part of the policy where a certain area reverts to the government over a period of time—both companies have already said they are interested in bidding for these areas.

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