Oil and gas exploration in India is set to reach a new maturity level with the Government taking steps that will lead to replacing the current fixed auction of blocks mechanism with a system of continuous bidding.
Petroleum and Natural Gas Minister M. Veerappa Moily has given his approval for setting up the long-pending National Data Repository (NDR), which is a Government-sponsored data bank, under the Directorate General of Hydrocarbons (DGH).
This is not the first attempt by the Government to set up a repository. A few years ago, the DGH had called for bids from prospective consultants for setting up a data bank. But there was a dispute over the selection process, leading to the Government cancelling the bids.
Now, with this approval, the Ministry has formalised the system, an official said, adding that approvals had also been given for appointing Engineers India Ltd (EIL) as the project management consultant, as also for calling of tenders from national as well as international players to set up the data bank.
The estimated cost of the project is over Rs 55 crore. The repository will help store and maintain hydrocarbon exploration and production data in a safe and re-usable manner. It will also facilitate efficient data reporting, exchange and trading.
This will bring down the exploration costs of companies, as data collection is the most important component of the business. For instance, if the exploration cost is $100 million, a large part of thisamount goes into acquiring data, assessing it, and undertaking geographical studies.
The repository will also facilitate an Open Acreage Licensing Policy (OALP) regime where the companies can select any block on offer at any time, without waiting for the regular bid rounds.
Under the present New Exploration Licensing Policy (NELP), fixed areas are on offer for a stipulated period within which the prospective contractors have to bid.
Introduction of OALP will provide continuous opportunity to bidders for expediting the oil and gas hunt in the country. OALP is already operational in Australia, Canada, and Pakistan. It can be operationalised simultaneously with the NELP rounds.
Data is available with many companies, a senior official said. ONGC has the largest data bank. Oil India, Reliance Industries, Cairn (India) have data which is exclusive to them. With the NDR in place, the information will be available to all.
But, modalities will need to be worked out on how the companies will be allowed to access the data.