Government appoints panel to review oil firm contracts

New Delhi, May 31 (IANS) The government Thursday set up a panel headed by C. Rangarajan, chairman of the prime minister's economic advisory council, to review production sharing contracts in the oil and gas sector.

The committee will submit its recommendations by Aug 31 this year.

The six-member committee will look into "all modifications necessary for future production sharing contracts so as to enhance production of oil and gas and the government's share of this while minimising procedures for monitoring the expenditure of producers", according to a statement released by the Prime Minister's office.

Prime Minister Manmohan Singh has approved the constitution of the committee on the request of Petroleum and Natural Gas Minister Jaipal Reddy.

The committee has been asked to review the existing production sharing contracts, including in respect of the current profit-sharing mechanism with the Pre-Tax Investment Multiple (PTIM) as the base parameter.

The government has also asked the committee to suggest structure and elements of the guidelines for "determining the basis or formula for the price of domestically produced gas, and for monitoring actual price fixation".

Members of the committee include B.K. Chaturvedi, member Planning Commission, Jagannadha Rao, former judge of the Supreme Court, Ramprasad Sengupta, professor at Centre for Economic Studies and Planning, JNU, J.M. Mauskar, former IAS officer, and Joeman Thomas, managing director of ONGC Videsh Ltd.