India is looking to improve its oil and gas exploration policy to make it more attractive for domestic and foreign investors. The Government plans to initiate the tenth round of auction under the New Exploration Licensing Policy (NELP) regime in 2012 after making changes to the existing policy.
“We look forward to put more investor friendly regime before next round both for investment and from the point of pricing. We have referred the issue to a committee headed by C. Rangarajan, Chairman of the Prime Minister’s Economic Advisory Council,” Oil Minister S. Jaipal Reddy said at the Petrotech 2012 on Sunday.
Rangarajan panel is expected to submit its recommendations in the next one month. The committee is examining the present production sharing contract (PSC), which has the cost-recovery mechanism.
It is to be seen if the panel would suggest continuation of the PSC with minor changes in the cost-recovery mechanism or shift to a production-linked payment regime.
Currently, production-linked payment regime is applicable only for exploration of coal-bed methane blocks.
“If PSC is to be improved or replaced, the Union Cabinet has to clear it,” Reddy said.
On August 17, Minister of State for Petroleum and Natural Gas R.P.N. Singh informed the Lok Sabha that the NELP has attracted about $ 20 billion investments so far.
In the NELP –IX bidding round, 74 bids for 33 blocks were received from 36 companies.
Reddy said that certain blocks couldn’t be allocated even after competitive bidding. This is primarily because of objections from the Ministry of Defence.
Oil Secretary G.C. Chaturvedi said that a committee headed by the Cabinet Secretary would take up clearance proposals if the project is pending for more than its required timelines.