This has resulted in Indian producers potentially losing USD 2 billion annually in value added assuming they can replace imports entirely, it said.
"We believe the current gas price regime is not incentivizing domestic capex sufficiently as we expect prices under the current formula to decline to USD 3.6 per million British thermal unit in FY17 while cost for new deep-water discoveries ranges between USD 6 to USD 7 per MMBtu," Goldman said.
The Oil Ministry earlier this week floated a consultation paper for freeing prices of natural gas produced from fields auctioned in future. The rates for existing and old fields will remain to be priced at the current formula which uses average price prevailing in gas-surplus economies.
The nomination blocks of ONGC and Oil India with cost ranging from USD 3.2 to USD 3.6 per mmBtu would fail to make economic returns at the new rates.
The BJP-led government had in October last year approved a new pricing formula for all domestically produced natural gas.


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