BG opposes govt's move on profit gas

British firm BG Group has opposed the government's move to take its share of production from gas fields in kind saying it will distort level playing field and give unfair advantage of state-run gas utility, GAIL India Ltd.

"The right of government to take profit gas in kind is erroneous as it will restrict the marketing rights of contractors and result in them being unable to commit definite volumes to customers," the company, which owns 30 per cent stake in Panna/Mukta and Tapti oil and gas fields off Mumbai, said in its annual review report.

The government has a right to a certain percentage of oil and gas produced from domestic fields. Till now the government was taking its share in cash (the value of its share) but now it plans to take the same from gas fields in kind (as natural gas).

It plans to give its share of gas to GAIL, against whom private firms like Reliance and BG compete, for marketing.

BG India CEO, Nigel Shaw, at an industry interaction with Petroleum Minister Mani Shankar Aiyar last week, had stated that taking government's share of profit from the gas fields in kind would make marketing of gas difficult as "in mature fields the amount of profit gas can be almost 90 per cent."

He also said this would give unfair advantage to incumbent, GAIL and distort level playing field.

The British oil and gas major was also opposed to the proposed mandatory 25 per cent excess capacity to be built in all pipelines and wanted contract carriage for gas transmission rather than common carrier.