Legacy problems in oil and gas: New licensing policy hurting old players

Participants in original rounds of privatisation unhappy with key changes in production sharing contracts that are up for renewal

As India enters the next phase of oil and gas exploration policy through the recently launched open acreage licensing policy (OPAL), the curtains have fallen on the policy regimes of the 1990s that opened up the business to the private sector. The earlier regimes are, however, beset with legacy problems from the production sharing contracts (PSCs) signed between the government and contractors.

For 28 oil and gas blocks that were given out to companies in the first round of privatisation, the immediate issue is the renewing of their contracts. In March 2016, an extension policy for these blocks was notified