New oil, gas auction policy, data repository launched
Come July 1 and India's oil and gas companies will be able to select exploration blocks on their own, without waiting for a formal bid round from the government, thanks to the Open Acreage Licensing Policy (OALP) launched on Wednesday.
As a necessary complement to the OALP, the country's first national data repository (NDR) was also launched here by Petroleum Minister Dharmendra Pradhan. The NDR will allow explorers to access seismic data on the sedimentary basin before making their bids.
The twin launches of OLAP and NDR are set to give India's oil and gas exploration a big push.
"The OALP and the NDR initiatives, being launched under the new Hydrocarbon Exploration and Licensing Policy (HELP), are two major steps in India's journey towards achieving energy security," Pradhan said at the launch, adding that the major part of Indian sedimentary basins continue to remain unmapped.
Officials said this would be the largest such depository in the world for reliable sub-surface data, which can be accessed digitally.
Stating that the government wanted to "propel hydrocarbons exploration to the next higher orbit", Pradhan said: "Investors from July 1 can carve their own area before the formal bidding."
"And with the high-tech NDR, which only a few countries have, India has entered this league of nations."
While HELP was approved by the government last year, the oil and gas industry has been pushing for including petroleum products under the Goods and Services Tax (GST), but the GST Council is yet to consider the proposal.
The Minister explained that once a company demarcated the area by identifying the size and boundaries, the government would put it up for bidding and award it to the firm that offers the maximum.
Bidders will be offered the choice of either a six-year Petroleum Operations Contract for exploration, development and production or a two-year Reconnaissance Contract for exploring hydrocarbons.
Pradhan said these new initiatives were part of the government's efforts at significantly boosting hydrocarbons production through "minimum government and maximum governance".
The government has already put up 67 small oil and gas fields for auction under HELP, approved in March 2016, which is based on a revenue-sharing model as opposed to cost-and-output-based norms earlier.
The new model will replace the controversial production-sharing contract that has governed the bidding under nine earlier New Exploration Licensing Policy (NELP) rounds.
The PSC regime, which allows operators to recover all investments made from sale of oil and gas before profits are shared with the government, was criticised by India's official auditor, who said it encouraged companies to keep inflating costs so as to postpone sharing of profits.
Bidding under the OALP would open twice a year, with the July bid winners to be slated for award of blocks by the time of the next round in January 2018, Pradhan said.