Petroleum minister Dharmendra Pradhan on Wednesday said the oil ministry is looking at awarding oil blocks under the revamped Hydrocarbon Exploration Licensing Policy (HELP) by December this year.
“Open Acreage Licensing Programme (OALP), the new bidding mechanism for revamped HELP, will now allow investors to bid for oil and gas fields throughout the year, India’s hydrocarbon reserves will be up for auctions from July 1,” Pradhan said at the sidelines of the official launch of OALP and National Data Repository. “We are hoping to award the first oil and gas field under HELP by December this year,” he added.
The differentiator for the new hydrocarbon licensing policy would be easing of E&P norms including single license for exploration and production of conventional as well as non-conventional hydrocarbon resources, option to select blocks without waiting for formal bid rounds, revenue sharing model with no micro-management by the government as opposed to profit sharing model under the previous policy and pricing and marketing freedom.
Commenting on the new policy Sudheer Mathur, Acting CEO of Cairn Oil & Gas, the oil and gas arm of London-listed Vedanta, hailed the new bidding mechanism launched by the government and added that such policy changes will go a long way in reducing the country’s oil import dependence.
“The introduction of OALP and National Data Repository (NDR) is a significant step and we welcome it. OALP is a fundamental shift and a transformative step in India’s hydrocarbon Exploration and Production (E&P) history. We congratulate the Minister of Petroleum, Ministry officials and the Director General of Hydrocarbons. This policy reiterates Government of India’s commitment to reduce administrative and regulatory burden, thus enhancing ease of doing business in the country,” Mathur said.
He added a single license to explore all forms of hydrocarbons, no cess on domestic crude oil production and reduced rates of royalty are some of the many enabling provisions which will further stimulate investments in the sector.
Speaking at the event, Pradhan stated that out of 42 cabinet decisions taken during the last three years under the PM Modi’s government, 22 cabinet decisions were taken for the E&P sector. He also said the government will announce new policies around Enhanced Oil Recovery-Improved Oil Recovery, Production Enhancement Contracts, Shale Oil and Gas Policy for NELP and Pre-NELP blocks, next set of Production Sharing Contract Reforms and second round of Discovered Small Field auctions.
The new bidding mechanism launched today will allow interested firms to bid for blocks of their choice at any time of the year with the help of NDR — a comprehensive database of the country’s key sedimentary basins that will provide the bidders data on contract areas that will be available for auctioning.
Under the new bidding mechanism, an investor will be allowed to put forth an Expression of Interest for undertaking contracts under Petroleum Operations Contract (POC) or Reconnaissance Contract (RC). The investor will have the liberty to apply for such contracts bi-annually (1 July- 31 December and 1 Jan-30 June) and may also participate in rounds of auctions conducted by the regulator DGH over and above the applications made under OALP.