OPINION: India’s decision to slap a windfall tax on domestic oil production could trigger a slowdown in exploration and development activities in the South Asian nation and possibly diminish the appeal of upcoming licensing rounds.

State-owned oil producers such as Oil & Natural Gas Corporation (ONGC), Oil India Limited (OIL) and Vedanta-owned Cairn Oil & Gas look set to be heavily affected by the government’s decision to impose a levy of $294.3 per tonne on domestic crude production.

One industry expert suggested oil producers will take a hit of $10 to $12 per barrel from the tax.