1. Hydrocarbons: Open-acreage bidding for fields to start soon

Hydrocarbons: Open-acreage bidding for fields to start soon

In what could mark a paradigm shift in the country’s hydrocarbon exploration policy, the government on Wednesday launched the National Data Repository (NDR) along with the Open Acreage Licensing Policy (OALP).

By: | Published: June 29, 2017 6:39 AM
Hydrocarbons, Hydrocarbons industry, Open-acreage bidding, National Data Repository, NDR, Open Acreage Licensing Policy, Hydrocarbon Exploration Licensing Policy, New Exploration Licensing Policy, NELP, National Seismic Programme The explorers will be able to submit applications starting July 1, 2017 and the round will go on till November. (Image: PTI)

In what could mark a paradigm shift in the country’s hydrocarbon exploration policy, the government on Wednesday launched the National Data Repository (NDR) along with the Open Acreage Licensing Policy (OALP). This is the first time in the last seven years, barring the discovered small fields auctions earlier this year, that new areas will be offered to investors for exploring oil and gas within the country’s boundaries. NDR and OALP — which was soft launched earlier this year — are part of the Hydrocarbon Exploration Licensing Policy (HELP), which succeeded the New Exploration Licensing Policy.

The explorers will be able to submit applications starting July 1, 2017 and the round will go on till November. While the expressions of interest received will be evaluated, a fresh round will be launched starting January 1, 2018. For now, two rounds will be done each year. The government has already received queries from investors, including overseas giants, for the Kutch Basin, Krishna-Godavari Basin, Rajasthan and even Assam fields, as reported by FE earlier. While NELP contracts were offered under production-sharing contracts (PSCs), HELP will be under a revenue-sharing mechanism wherein contractors will share revenue from the start of the production period. Under PSC contracts, explorers first recover costs from successful discoveries and later pay the government’s share.

“We thought of going for the progressive HELP as NELP was not performing. The total production of oil and gas from NELP blocks is equivalent to only three days of India’s oil consumption,” said petroleum minister Dharmendra Pradhan. The Union Cabinet had in March 2016 approved HELP, in order to provide uniform licences for exploration and production for conventional as well as unconventional oil and gas resources. “In the last years, we have taken 22 Cabinet decisions on the hydrocarbon exploration and production sector,” added Pradhan.

NDR, which has been prepared by the Directorate General of Hydrocarbons (DGH), will open up 2.8 million sq km of the country’s sedimentary basins, helping accelerate exploration and production activities in India. “The last time that seismic data acquisition of the unapprised sedimentary basins was undertaken by the government was nearly 25 years ago. We realised that lack of updated, validated G&G (geological and geophysical) data on Indian sedimentary basins was hampering our E&P (exploration and production) efforts. That’s why the National Seismic Programme was started last year,” said Pradhan.

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OALP will offer on-tap bidding and exploration of hydrocarbon blocks and allow freedom for pricing and marketing for fresh production. Explorers will be able to access sedimentary block-level data before seeking petroleum-production licences. A contractor will also be able to apply for survey of a particular area under reconnaissance survey contracts. After the survey, the contractor will be allowed to exit the area by sharing data with the government, which will be included in the pre-bid document of that particular area for auction.

The winner of the eventual auction for that particular area will have to pay for the data directly to the surveyor. However, in case the surveyor bids for the same area, it will get negligible preference points. According to Atanu Chakraborty, director-general, Director-General of Hydrocarbons, with NDR’s launch, India has catapulted itself to the select league of nations which have such hydrocarbon database and is the among the top 10 in terms of size.

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