In a bid to attract foreign investment, India is considering to liberalize the prices of the locally produced oil and natural gas from state controls says Finance Minister P Chidambaram.
"We are at an advanced stage -a Cabinet paper is under consideration on how to move from a production sharing model to revenue sharing model for oil and gas explored and excavated by companies," Finance Minister P Chidambaram told media encouraging investors.
Through a production sharing regime, India allows 100 per cent of foreign direct investment (FDI) in exploration and production of oil and gas wherein the companies after recovering their investments shared profit with the government.
Under the new regime being mulled over, companies will be asked to bid for oil and gas they will share with the government from the very first day of output.
Moreover, companies bidding for the highest share will get license to explore.