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India’s latest offering of oil and gas blocks under the Hydrocarbon Exploration Licensing Policy (HELP) may not happen before January next year.
The Director General of Hydrocarbons (DGH), the upstream technical arm of Ministry for Petroleum & Natural Gas, wants to be fully prepared with data as well as new bid contract structure – revenue sharing model – before launching HELP.
Cabinet nodOn March 10, the Union Cabinet approved HELP, the new contractual regime under which hydrocarbon acreage will be developed in future. HELP’s open acreage policy provides for exploration and companies to choose and carve out blocks based on the data on the National Data Repository and then bid for these areas.
“HELP requires a lot of data in the National Data Repository. The work is almost 80-90 per cent complete. Once the discovered small fields auction is complete, we will complete the work for the data required for HELP,” said Atanu Chakraborty, Director General, DGH.
Work to resumeThe DGH will soon resume work to complete the remaining 10-20 per cent of the work of providing data about potential oil and gas reserves in various parts of the country to enable the launch of HELP.
The auction process for discovered small fields is likely to be completed only by early January next year.
Data quality vitalBoth government officials and industry analysts agree that the success of HELP depends on the quality and depth of data about the hydrocarbon potential in the country.
“We are in the final stages of preparing the bid structure. There are still a few things we need to understand about the new model,” Chakraborty told BusinessLine .
HELP, which also provides for revenue sharing contract, also proposes to give contractors marketing and pricing freedom for the crude oil and natural gas produced.
The DGH remains open to improvements and tweaks to the model revenue sharing contract. “The model revenue sharing contract is in the public domain, we want people to give us comments on that,” he said.
The other key aspect of the policy is a single licence for exploring any kind of hydrocarbon. This is expected to cut red tape as now there will be one policy framework, which will also hopefully plug the gaps in the NELP model.
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