State-run oil and gas exploration companies ONGC and Oil India may be offered blocks on nomination basis in the Northeast region keeping in view their strategic location and the experience of working in these frontier areas. This is part of a comprehensive startegy current being prepared by the Narendra Modi government to accelerate exploration and production activities in the hydrocarbon-rich Northeastern states.
?The petroleum ministry and Directorate General of Hydrocarbons (DGH) are working on a comprehensive package to ramp up exploration and production (E&P) acitivities in the Northeast. The policy would be put before the Cabinet Committee on Economic Affairs (CCEA) in next two months,? said an oil ministry official.
The government is contemplating concessions to exploit more hydrocarbon resources in the Northeast. In view of logistical and technical challenges as well as limited weather window in these areas, it may introduce a total exploration period for 10 years, comprising first phase of six years and then four years in the second phase. The oil ministry also believes that there be the possibility of extending tax holiday from current seven years to 10 years for future NELP rounds.
?Creation of a common hub in the Northeast for specialised tools and services by service providers will be helpful. An SEZ with necessary fiscal incentives could be developed. The major international technical and logistics operators could be invited to set up base in this SEZ,? the official added.
The policy, which is under works, would also aim for time-bound clearances from ministries of environment, defence, home affairs and state governments. All acitivities required for taking these clerances are targeted to be made simpler and IT-enabled.
More than 100 oil and gasfields have been discovered by Oil India and ONGC in Assam, Nagaland and Tripura. Currently, ONGC drills about 1 million tonne of hydrocarbon, while most of Oil India’s FY14 crude oil production of 3.466 million tonne in FY14 came from nominated fields in Northeast.
Under the production sharing regime, about 31 exploratory blocks have been awarded across Arunachal Pradesh, Assam, Manipur, Mizoram, Nagaland and Tripura, covering an area of 43,722 square kilometre. Of these, nine blocks have been relinquished. In addition, there are two discovered fields (Kharsang in Arunachal Pradesh and Amguri in Assam) under production. Till now, seven gas discoveries have been made inlcuding one each in Assam and Mizoram and five in Tripura.