The Petroleum and Natural Gas Rules 1959 (PNG Rules)

Regulates exploration licenses and mining leases in respect of petroleum and natural gas belonging to Government of India, and the conservation and development thereof. It establishes royalties at ten percent of the value at well head of natural gas obtained by the lessee. This is not be payable in respect of crude oil, casing head condensate or natural gas which is unavoidably lost, returned to the reservoir or is used operations relating to the production of petroleum or natural gas. Moreover, it requires that monthly reports be presented with information concerning how much oil, gas and condensate were produced and further related details be provided upon request. It also establishes the possibility of on-site inspections (surveys) by qualified surveyors at any time and penalties for nonconformity.

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