Oil and gas exploration companies may get some relaxation in their operations. The finance ministry is favourably considering the relaxations sought by these companies in import of leased goods both for petroleum exploration operations and coal bed methane operations undertaken under the new exploration licensing policy.

However, officials clarified there would be no change in duty for imports which currently stands at zero for import of capital goods.

One of the major relaxations being currently considered is that goods imported for one project can be freely transferred to other projects undertaken by the same importer without paying additional duty or furnishing re-export bond. Re-export bonds are furnished to undertake that the goods are liable to be re-exported anytime if it is found to be in violation of the use. Earlier the importer was required to export the leased goods back and then import it for a similar project.

Officials said the relaxations might do away with the procedure of re-export bond, which is a big procedural hassle and entails cost. Re- export bond is furnished by the importer as a certificate from a nationalised/schedule bank in original showing realisation foreign exchange against export in the goods.

The relaxations could allow one out of the entire consortium companies engaged in exploration activities to engage in imports of such capital goods. Till now it used to be a major bottleneck for getting government clearances for import of capital goods through a consortium especially in availing the zero duty benefits.

Besides, the sub-contractors of the company who are engaged in importing need not be registered with the government. However, the sub-contractor has to give an undertaking that it is a bonafide sub contractor of the contractor.

Officials said these modifications are aimed at expediting the oil and gas exploration activities in India. The 12th Plan period is expected to witness a growth of energy consumption at 6.5-7 per cent which would result in an import dependence from the current rate of 33 per cent to eight per cent by end of the Plan period, a report stated. Therefore officials said many such intiatives would be taken to emphasise domestic oil and gas production, speedy development of oil and gas discoveries during Nelp rounds of bidding. This is besides import of liquified natural gas and acquisition of oil and gas assets overseas. Extraction of coal bed methane , shale gas, developing underground coal gas are other areas to be focussed on for ensuring energy security.