Those who make the discovery are to choose from one of three things. The first is an option to relinquish the block. Another is to develop the discovery, after conducting a Drill Stem Test (DST); if this is not done on time, half the DST cost will be disallowed. And, even if done on time, the cost recovery is to be limited to $15 million (Rs 94.8 crore).
"The third is to develop the discoveries without conducting a DST, in a ring-fenced manner," went the government statement.
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If the contractor does not opt for any one of the three within two months, the area of the discovery will be automatically considered as relinquished.
The Cabinet Committee on Economic Affairs, chaired by the Prime Minister, approved the policy on Wednesday, for discoveries in blocks awarded under the New Exploration and Licensing Policy.
"The policy will settle the long-pending issue with regard to 12 discoveries in five blocks pertaining to Oil and Natural Gas Corporation (six discoveries) and Reliance Industries (six discoveries) and also establish a clear policy for the future," went the statement. Also, it said, aiding in transparency and uniformity in decision-making, as against the case by case approach of the past.
The 12 discoveries are estimated to have gas reserves of around 90 billion cubic metres.