DGH reduces compliance burden on exploration activities in oil & gas blocks

Approvals for three processes that would need to be submitted within 30 days

The Directorate General of Hydrocarbons (DGH) has further lowered the compliance burden on exploration and production activities in some oil and gas blocks. This relaxation has been extended to blocks awarded under the New Exploration Licensing Policy (NELP) and pre-NELP regime. The NELP and pre-NELP blocks were awarded between 1980 and 2012.

According to the DGH, the compliance relaxation is with respect to approvals and submissions of documents under the Production Sharing Contracts (PSCs) of NELP and pre-NELP blocks. Under the fresh rules, applicable from August 15, 9 processes and documents shall be accepted on self-certification basis online and no further approvals will be required for the same.

These include crucial processes such as well location review, change or deepening, and notice for entering next phase or relinquishment. The Bank guarantee and legal opinion, and renewal and revised bank guarantee documents will also be accepted on self-certification.

Approvals for three processes would need to be submitted within 30 days after self-certification are Work Programme and Budget, Appraisal program or its revision, and field development plan or its revision.

Prior government approvals will be required for six processes. These include extension of exploration phase, liquidated damages on account of cost of unfinished work programme, and assignment/transfer of participation interest. The extension of production sharing contract, and site restoration/abandonment plan will also require prior approvals from the Managing Committee, Ministry of Petroleum and Natural Gas or the DGH.

A DGH statement said that these relaxations are an extension of the simplification of procedures initiated in April 2020. This is being done with the objective to increase investment and domestic oil and gas production.

In another development related to India’s oil and gas exploration and production, the third round of Discovered Small Field auctions has been deferred. “DSF Bid Round-III bidding date has been postponed. New Date will be intimated shortly,” a notice on the DGH website said.

The round was launched on June 10, 2021. Under this bid round, 32 Contract Areas comprising 75 discoveries are on offer. These oil and gas discoveries were once made by public sector undertaking oil companies, Oil and Natural Gas Corporation (ONGC) and Oil India (OIL). But they were eventually relinquished citing unviability. This was either due to their small size or because of the restrictive fiscal regimes under which they were awarded to these company.

There are 19 onshore, 54 shallow water and 2 Deepwater discoveries on offer in this third round. This is the largest number of discoveries on offer in any of the DSF rounds till now. An online pre-Bid conference was held on June 30, 2021 and bids were earlier expected to be closed on August 31, 2021.

 

Relaxed compliance burden on NELP/pre-NELP operations

9 processes will be accepted on self-certification basis and would not require any additional approvals and
3 processes where approvals will need to be taken after 30 days
6 processes where approvals will still be needed