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Petroleum Federation of India(PETROFED) presented its paper on Review of Indian E&P Licensing Policy to Shri Mani Shankar Aiyar, Minister of Petroleum & Natural Gas and Panchayati Raj here today. The major recommendations include transition to ‘Open Acreage Licensing’ Policy(OALP), National Data Repository required, offer different terms for different types of blocks, put in place an upstream regulator, etc.
Background:
In the CEOs conclave on “Role of Private Sector in Oil Economy” on July 7, 2005 organised by PetroFed, Shri Aiyar had asked PetroFed to prepare and submit a Paper for consideration by the Petroleum Ministry, with consensual suggestions from international, Public Sector and Private Indian companies involved in E&P activities to identify concerns in exploration licensing by PetroFed was also to suggest improvements on how exploration policy can be changed if the NELP was sufficiently attractive for them and if the policy would need to be radically changed for it to take a ‘newer’ look for the majors to be attracted to India.
PetroFed in association with its member company and knowledge partner PricewaterhouseCoopers prepared this paper on Review of E&P licensing policy.
To attract E&P investments, the paper has suggested following policy changes and measures:
A scientific review of policy around the objectives of India in E&P sector be taken up.
In order to address to sensitivity of companies to both above-ground and below-ground risks, multi pronged approach be followed over and above the current periodical “all-risk” awards and other geo-seismic data acquisition efforts by GoI/DGH.
Concurrent to the periodical rounds, award contracts for data acquisition at no cost to Government of India like Technical Evaluation Contract(TEC), Non Exclusive Speculative Survey(NESS), Promote License(PL).
Since any major policy change would need over 2-3 years, current periodical bidding rounds(NELP) needs to co-exist.
Transition into ‘Open Acreage’ licensing.
The Government may solicit inputs from companies on quarterly basis for identification of blocks. Such blocks may be announced for others to express interest and awarded quarterly on competitive basis.
Expedite creation of National Data Repository.
Offer different award terms and PSC terms for different types of blocks – Onland, Frontier, Deep-Water, Ultra-Deep-Water, Shallow Water, poorly explored, etc.
Allow involvement of companies in identification of blocks for periodical rounds.
To encourage competitive environment, independent upstream regulator needs to be in place.
Small and medium discovered fields may be offered to companies with low risk appetite.
RCJ/GS/Press Release/Paper on E&P Licensing(19.09.2005)
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