Government has overhauled oil and gas exploration policy after two decades.
Government will not charge any share of profit on hydrocarbons produced from less explored areas as it looks to attract the elusive private and foreign investment to raise domestic output.
Irrespective of the basins, producers will get complete marketing and pricing freedom for oil and gas in future bid rounds.
Companies are required to pay a share of revenue from oil and gas produced in Category-I sedimentary basins such as Krishna Godavari, Mumbai Offshore, Rajasthan or Assam where commercial production has already been established.
Companies will be charged only prevalent royalty rates on oil and natural gas in the less explored Category-II and III basins.