Definition of petroleum changed for uniformity in ops

Further easing the oil and gas exploration norms, the government has redefined “petroleum”, thereby giving operators the option to explore all hydrocarbons, including traditional oil and gas, shale, coal-bed methane and hydrates, in the same field.

In a notification dated July 24, the ministry of petroleum and natural gas said petroleum means “naturally occurring hydrocarbon in the form of natural gas or in a liquid, viscous or solid form, or a mixture thereof”.

However, it will not include coal, lignite and helium occurring in association with petroleum or coal or shale.

The notification, amending the Petroleum and Natural Gas Rules of 1959, is likely to benefit not just staterun companies like Oil and Natural Gas Corporation (ONGC) and Oil India, but also private sector majors like Vedanta.

“The amendment will open up exploration of all hydrocarbons in existing fields which is line with the new Hydrocarbon Exploration and Licensing Policy. This should help enhance domestic exploration and production of hydrocarbons, increasing India’s energy security and reducing our dependency on imports,” said Prashant Modi, managing director and chief executive officer of Great Eastern Energy Corporation.

This comes two after the Hydrocarbon Exploration and Licensing Policy (HELP) was cleared by the Union Cabinet in March 2016, which allowed uniform licence for exploration and production of all forms of hydrocarbons. The move will open up more revenue opportunities for many of the 117 companies operating in India.

After nine rounds of the New Exploration Licensing Policy (NELP), at least 11 public sector undertakings, 58 private and 48 foreign companies marked their presence in India. Even though India is not known for its shale reserves, it is believed to have at least 91.8 trillion cubic feet of CBM reserves. The government has already conducted auctions under the discovered small field (DSF I) and Open Acreage Licensing Policy (OALP-I) in which blocks were allotted under a uniform licensing policy. However, both the rounds did not attract the interest of foreign players.

Early this month, the Cabinet rolled out sops for companies like ONGC and Oil India by relaxing production sharing contracts (PSC) of Pre-Nelp and NELP blocks. These include giving relief to companies on sharing of royalty and cess in preNelp exploration blocks.

This is after a series of measures to boost exploration, including the government relaxing rules for stateowned Coal India for extraction of natural gas lying below coal seams in its blocks in a bid to ramp up production. Earlier, Coal India had to apply to the oil ministry for a licence to extract coal-bed methane from its coal blocks. Now, the world’s largest coal producer does not need such permission.