Gas Pricing Essay Example
Gas Pricing Essay Example

Gas Pricing Essay Example

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  • Pages: 1 (216 words)
  • Published: December 31, 2017
  • Type: Case Study
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The proposed new formula would result in a nearly doubled price of about $8 billion per matt. The Arranging Committee's basis for the formula is the weighted average price of natural gas in North America, Europe, and Japan markets, as well as imported liquefied natural gas. These guidelines will go into effect on April 1st, 2014 and will be applicable for five years, after which market discovery price may be adopted according to the Dry Keller Committee's roadmap. Additionally, the panel recommends that production sharing contracts with oil companies should be based on the amount of oil or gas produced from the field that the company is willing to offer to the g

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overnment. The new bidding system would award contracts to companies that are willing to produce the highest amount of oil or gas. Increasing natural gas prices will entice foreign majors to invest in untapped resources in the deep and ultra-deep water frontier basins, as well as reducing the steep energy import bill and incentivizing domestic producers. Increased gas prices would result in additional royalties and profits for both the government and public sector producers, such as. Furthermore, it will improve power generation and fertilizer production while supporting efforts to revive India's flagging gross domestic product growth which reached a decade-long low this year.

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