Open acreage re­places NELP as new pol­icy regime in oil li­cens­ing

Business Standard - - PRIVATE EQUITY - JY­OTI MUKUL

The gov­ern­ment an­nounced re­place­ment of the New Ex­plo­ration and Li­cens­ing Pol­icy (NELP) in the pe­tro­leum sec­tor with Open Acreage Li­cens­ing (OAL), un­der the frame­work of a Hy­dro­car­bon Ex­plo­ration and Li­cens­ing Pol­icy (HELP).

This re­places the con­tro­ver­sial ‘profit pe­tro­leum’ con­cept with a rev­enue share model.

OAL will al­low in­vestors look­ing at ex­plor­ing of hy­dro­car­bons to select blocks af­ter study­ing the data avail­able through the Na­tional Data Repos­i­tory (NDR), with­out wait­ing for a for­mal bid round from the gov­ern­ment.

In­vestors will have the op­tion to carve out an area of their choice and send an ex­pres­sion of in­ter­est (EoI) for re­con­nais­sance or a pe­tro­leum op­er­a­tions con­tract. The Di­rec­torate Gen­eral of Hy­dro­car­bons will fi­nalise the block and in­vite bid­ding bi-an­nu­ally. Other com­pa­nies can send on­line or phys­i­cal bids, fol­lowed by eval­u­a­tion and award of fi­nal con­tract. The con­tracts would MODEL REV­ENUE SHAR­ING CON­TRACT Uni­fied li­cence for all „ types of hy­dro­car­bons Rev­enue shar­ing „ fis­cal regime Graded roy­alty rates „ Mar­ket­ing and „ pricing free­dom


For ar­eas with mod­er­ate „ and sparse data Con­tract pe­riod two years, „ ex­tend­able by a year Con­trac­tor can li­cence „ data for 12 years


be awarded in Jan­uary and July ev­ery year though the EoI can be given per­pet­u­ally.

Union Pe­tro­leum Min­is­ter Dhar­men­dra Prad­han said, “We ex­pect OAL to ac­cel­er­ate ex­plo­ration ac­tiv­ity.” The min­is­ter said the gov­ern­ment was com­mit­ted to lib­er­alise the sec­tor by sim­pli­fy­ing pro­cesses, in­creas­ing mar­ket ac­cess and bring­ing de­vel­op­ments in the tech­nol­ogy do­main.

The re­con­nais­sance con­tract will be for two years, ex­tend­able by a year. The pe­tro­leum op­er­a­tions con­tract will have an ex­plo­ration pe­riod of eight to 10 years, and a con­tract pe­riod of 20 years. For a given area, the EoI for a pe­tro­leum op­er­a­tions con­tract would be pre­ferred over a re­con­nais­sance con­tract.

The NDR was un­veiled on Wed­nes­day and firms may iden­tify stretches through it. In the cur­rent round, 2.7 mil­lion sq. km con­sti­tut­ing the en­tire un­ex­plored area is be­ing of­fered. An area of 10 minute x 10 minute (ap­prox. 330 sq. km) has been clas­si­fied as sec­tor for all types of hy­dro­car­bons. One or more than one con­tigu­ous sec­tor can be com­bined to form a block for giv­ing EoI. The NDR has grid­ded the In­dian sed­i­men­tary basins into sec­tors and di­vided into zones with cor­re­spond­ing data. Nine rounds of NELP had at­tracted $40 bil­lion (~2.6 lakh crore) in in­vest­ment so far. Prad­han, how­ever, said the to­tal oil and gas pro­duc­tion from NELP is equiv­a­lent to only three days of oil con­sump­tion. The last NELP round was in 2010, af­ter which OAL is the big­gest of­fer­ing for ex­plo­ration.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.