While Oil and Natural Gas Corporation is expected to gain over Rs 200 crore (Rs 2 billion), oil-producing states like Assam and Gujarat will net Rs 436 crore (Rs 4.36 billion) from the shift to a three-tier ad valorem royalty regime on crude oil instead of the present fixed tax regime.

Crude oil production from onshore fields would be taxed at 20 per cent of the well-head price while offshore fields would attract 10 per cent tax.

Royalty on deepwater fields would be 5 per cent, Petroleum Minister Ram Naik said in New Delhi on Wednesday.

Presently, crude oil produced from pre-NELP blocks is taxed at Rs 850 per tonne.

While the onland royalty revenues goes to the respective states, centre is the beneficiary of royalty revenue from offshore fields.

The new royalty regime would be effective from April 1, 1998, Naik said.

ONGC would gain from the new royalty regime as half its output comes from the Mumbai offshore fields, which will attract lower tax.

Assam and Gujarat will get Rs 436 crore as arrears for the period between April 1, 1998 and March 31, 2002.

"Royalty on crude oil production from onland and shallow water offshore areas will be at 20 per cent during the period April 1, 1998 and March 31, 2002. Any additional amount accrued as a result of royalty revision during this period for production from onland areas will be paid by the Centre," Naik said.