Figure 3: No Copyright Infringement Intended

Context:

• The central government has launched the Open Acreage Licensing Programme (OALP) Bid Round-VII for International Competitive Bidding. 

About Hydrocarbon Production Licensing Policy (HELP):

Freedom in Pricing:

• The new policy also gives the investors the much needed freedom in pricing and marketing for crude oil and natural gas.
• The contractor will have freedom for pricing and marketing of gas produced in the domestic market on arms length basis.

Uniform Licensing:

• There will be a uniform licensing system which will cover all hydrocarbons, under a single license and policy framework.

Open Acreage licensing:

• An ‘Open Acreage Licensing Policy’ will be implemented whereby a bidder may apply to the Government seeking exploration of any block not already covered by exploration. This will enable a faster coverage of the available geographical area.

Revenue Sharing:

• Contracts will be based on ‘biddable revenue sharing’. Bidders will be required to quote revenue share in their bids and this will be a key parameter for selecting the winning bid.
• A concessional royalty regime will be implemented for deep water (5%) and ultra-deep water (2%) areas. In shallow water areas, the royalty rates shall be reduced from 10% to 7.5%.

Protection of Government Interest:

• To safeguard the Government revenue, the Government’s share of profit will be calculated based on the higher of prevailing international crude price or actual price.

Advantage:

Extraction of all resources:

• The uniform licence will enable the contractor to explore conventional as well as unconventional oil and gas resources including CBM, shale gas/oil, tight gas and gas hydrates under a single license. 

Increased Production:

• It will enhance domestic oil & gas production, bring substantial investment in the sector and generate sizable employment. 

 

About Open Acreage Licensing Policy-OALP:

• A critical part of the Hydrocarbon Exploration and Licensing Policy.
• Provides uniform licences for exploration and production of all forms of hydrocarbons, enabling contractors to explore conventional as well as unconventional oil and gas resources.
• Fields are offered under a revenue-sharing model and throw up marketing and pricing freedom for crude oil and natural gas produced.
• Under OALP, companies are allowed to carve out areas they want to explore oil and gas in. Once an explorer selects areas after evaluating the National Data Repository (NDR) and submits the expression of Interest, it is put up for competitive bidding.

 

About National Data Repository:

• NDR is a government-sponsored E&P data bank with state-of-the-art facilities and infrastructure for preservation, upkeep and dissemination of data to enable its systematic use for future exploration and development.

 

Progress of HELP:

• Since the launch of HELP on March 30, 2016, five rounds of OALP have been concluded for 105 E&P blocks; award of 21 blocks under sixth round of OALP is under progress.
• These 126 blocks comprise about 191,926 sq.km. of area spread across 18 sedimentary basins.