This story is from June 28, 2017

Now companies can choose where to scout for oil

Oil minister Dharmendra Pradhan on Wednesday launched the 'open acreage' licensing programme and National Data Repository - a database of sedimentary basins -- allowing exploration companies to bid for blocks round the year.
Now companies can choose where to scout for oil
Key Highlights
  • This would make it easier for explorers to do business in India and dismantle one of the last vestiges of control-and-command regime
  • HELP is based on revenue-sharing and is acknowledged as more straight-forward and transparent method.
NEW DELHI: Oil minister Dharmendra Pradhan on Wednesday launched the 'open acreage' licensing programme and National Data Repository - a database of sedimentary basins -- allowing exploration companies to bid for blocks round the year.
"We are offering greater choices for investments in the sector. There has never been a better time to invest in India’s E&P given the ample opportunities available to you all," Pradhan said at the launch.
This is the latest in a series of steps taken by the oil ministry, under Pradhan's watch, to make it easier for explorers to do business in India and dismantles one of the last vestiges of control-and-command regime in the exploration business.

The programme will come into effect from July 1 -- the day GST kicks in -- and replace the system wherein the government periodically sought bids for pre-demarcated blocks. Under the new programme, investors can carve their own blocks on the basis of the repository data.
The open acreage system and the repository are expected to supplement and strengthen the reforms in the sector and increase the level of involvement by investors in development of exploration sector.
The open acreage system aims at building on the Hydrocarbon Exploration Licensing Policy (HELP), launched last year, that simplified the fiscal regime and gives marketing and pricing freedom to explorers.
The initiative comes at a time when the government has set a target of reducing by 2022 the dependence on oil imports by 10% from 2015 levels.

HELP replaced the controversial profit-share regime, known as New Exploration Licensing Policy (NELP), that was criticised by the federal auditor for promoting gold-plating by investors and envisaged micro-management by the government.
HELP is based on revenue-sharing and is acknowledged as more straight-forward and transparent method. It also allows explorers to produce conventional and non-conventional hydrocarbons from a block under a single licence, while earlier regime had separate licences for natural gas, coal bed methane, shale gas and so on.
According to Pradhan, "Government has consciously tried to reduce administrative and regulatory roadblocks and to infuse new technologies."
"Going forward, the Government remains committed for making sustained and significant efforts to liberalize the sector by simplifying processes, increasing market access and bringing developments in the technology domain with the aim to enhance the efficiency of our oil and gas industry," he said.
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