Oil and Natural Gas Corporation Ltd. may miss the June 2019 target of starting production from its Krishna-Godavari basin block due to the implementation of new policies like Goods and Services Tax.
GST rollout and local purchase preference rules, including the one that mandates state-owned firms to source domestic iron and steel for infrastructure project are likely to result in a lag in production, said ONGC in a statement on the exchanges.
Clarifying on its last week's filing to stock exchanges, ONGC said the new policies it had cited for a possible delay in production from the basin pertained to local purchase preference policy, steel policy and GST policy.
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While the ONGC board had in March 2016 approved a $5.07 billion investment for bringing oil and gas discovered in the KG-DWN-98/2 or KG-D5 block in Bay of Bengal to production, new policies were formulated last year.
The Union Cabinet in May 2017 approved a policy that will prefer sourcing of domestic iron and steel for infrastructure projects by state-owned companies in a bid to boost Make in India.
Also Read: ONGC Is Said To Expect Delays In Its Biggest Project
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