West Bengal Oil Field Project on Brink of Liftoff: Petroleum Minister Sees Smooth Sailing Ahead
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New Delhi: Union Minister of Petroleum and Natural Gas Hardeep Singh Puri expressed optimism that the Ashoknagar Oil Field project in West Bengal would soon become operational. The minister stated that both Oil and Natural Gas Corporation (ONGC) and the state government are working to finalize the lease deed, with the recent notification of the Petroleum & Natural Gas Rules, 2025 expected to resolve issues related to stamp duty on lease and royalty. The Ashoknagar project, located in the North 24 Pargana district, has seen significant progress since the discovery of oil in 2018. ONGC has already invested ₹1,000 crore in the project, which is estimated to contain 240 million barrels of oil equivalents in place proven reserve. If production is maintained at 30% recovery, the cumulative production value could reach ₹45,000 crore, with the state of Bengal set to receive ₹4,500 crore. The minister emphasized that the state government's cooperation in exploration and production activities is crucial, as it generates revenue for the state. He pointed out that other states have seen substantial revenue from similar projects. Puri expressed confidence that the issues related to stamp duty on lease rent and royalty would be resolved, citing the recent exchange of letters between ONGC and the West Bengal government. The deal is expected to be finalized based on the exchange of letters on December 10 and 12. The minister stated that only upon signing of the lease deed can production from the block commence, paving the way for eventual ramp-up. The West Bengal government has issued a letter to ONGC regarding the computation of stamp duty, while ONGC has submitted a reply seeking the levy of stamp duty in accordance with the provisions of the recently notified PNG Rules. The rules state that the value of the lease shall be the total lease rent payable for its term, and royalty shall accrue to the state in on-land blocks based on production from the block.
