Upstream oil companies will now have to pay additional royalty on onshore crude production on gross realisation instead on net realisation, with respect from February 2014, amounting in excess of USD 1 billion. In its report, Citi has said that the incremental impact on ONGC would be negligible (0.3 percent of share price) as it has been providing this contingency in its books. However, Oil India will have a deeper impact as 100 percent of its oil production is onshore in Assam, and the company may take a hit of Rs 2,500 crore (3-7 percent of share price).
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