Govt soft launches new hydrocarbon licensing regime
The government has released the details of 26 unexplored sedimentary basins, which oil and gas companies could access before they seek an exploration and production license in their preferred area.
The data can be accessed from the Directorate General of Hydrocarbons (DGH) at any time and interested entities can place formal bids for the area of their choice from July 1, a person privy to the development said on condition of anonymity. Once the government receives a bid, it will call for counter-bids from the industry before granting a licence to the winner.
The so-called open acreage policy, which does away with the concept of government offering pre-demarcated blocks to bidders, seeks to have greater industry involvement in the hydrocarbon licensing process.
The idea is to attract more investments into exploration and lower the country’s import dependence. Firms can make bids round the year under this system. The oil ministry is likely to do a formal launch of the data repository before July 1.
“The National Data Repository is a huge step in offering information about the country’s sedimentary basins, which will enable investors to take informed decision about expressing interest in exploration,” said Debasish Mishra, partner, Deloitte Touche Tohmatsu India Llp. The data repository is a pre-requisite for auction of exploration and production licences under the new hydrocarbon exploration licensing policy (HELP), which replaced the earlier policy under which no auctions were held since 2009, Mishra said.
HELP also allows a contractor to produce both conventional fuels like oil and gas as well as unconventional fuels like shale oil/gas and gas hydrates under the same licence, unlike the earlier policy. HELP was announced in March 2016.