The Cabinet Committee on Economic Affairs on Wednesday gave the finance and petroleum ministers the power to award oil and gas exploration blocks to successful bidders under the Hydrocarbon Exploration Licensing Policy.
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday gave the finance and petroleum ministers the power to award oil and gas exploration blocks to successful bidders under the Hydrocarbon Exploration Licensing Policy (HELP), a move that could fast-track the process. Currently, awarding of blocks requires the CCEA’s approval. Under HELP, exploration blocks are to be awarded twice in a year.
The Cabinet also made changes in the Oil Fields (Regulation and Development) Act, 1948, which would allow Coal India and its arms to extract coal bed methane (CBM) under its coal bearing areas without applying for a separate licence.
The government expects that the step would enhance the availability of the gas and reduce its supply-demand gap.
HELP, which contains features such as revenue-sharing contract, single licence for exploration and production of hydrocarbon resources and marketing and pricing freedom, was introduced in March 2016. The open acreage licensing policy (OALP) is a critical part of HELP, where investors can carve out blocks of their own interest. Bidders can submit tenders to bid for for 55 exploration blocks under the first round of OALP till May 2, 2018. The bidding process started in the middle of January. Under OALP, six companies had submitted expressions of interest for the 55 blocks.
CBM is a generic term used for gas that is found in adsorbed state in coal. The CBM policy was first formulated in 1997, and later amended in 2013. The coal ministry, along with the ministry of petroleum and natural gas, had identified 26,000 square kilometres of coal basinal areas for CBM exploration, out of which 33 CBM blocks has already been awarded. As of July 2017, only 14 out of the awarded blocks were operational.