Come July 1 and India's oil and gas companies will be able to select exploration blocks on their own, without waiting for a formal bid round from the government, thanks to the Open Acreage Licensing Policy (OALP) launched on Wednesday by Petroleum Minister Dharmendra Pradhan who hoped to award the fresh blocks by December.
As a necessary complement to the OALP, the country's first national data repository (NDR) was also launched here on Wednesday. The NDR will allow explorers to access seismic data on the sedimentary basin before making their bids.
The twin launches of OLAP and NDR are set to give India's oil and gas exploration a big push.
"The OALP and the NDR initiatives, being launched under the new Hydrocarbon Exploration and Licensing Policy (HELP), are two major steps in India's journey towards achieving energy security," Pradhan said at the launch, adding that the major part of Indian sedimentary basins continue to remain unmapped.
Officials said this would be the largest such depository in the world for reliable sub-surface data, which can be accessed digitally.
Stating that the government wanted to "propel hydrocarbons exploration to the next higher orbit", Pradhan said: "Investors from July 1 can carve their own area before the formal bidding."
"And with the high-tech NDR, which only a few countries have, India has entered this league of nations."
Speaking to reporters later on the sidelines of the event, he said bidding under the OALP would open twice a year, with the July bid winners to be slated for award of blocks by the time of the next round in January 2018.
"We are hoping to award the first oil and gas field under HELP by December this year," he said.
While HELP was approved by the government last year, the oil and gas industry has been pushing for including petroleum products under the Goods and Services Tax (GST), but the GST Council is yet to consider the proposal.
The Minister explained that once a company demarcated the area by identifying the size and boundaries, the government would put it up for bidding and award it to the firm that offers the maximum.
Bidders will be offered the choice of either a six-year Petroleum Operations Contract for exploration, development and production or a two-year Reconnaissance Contract for exploring hydrocarbons.
Pradhan said these new initiatives were part of the government's efforts at significantly boosting hydrocarbons production through "minimum government and maximum governance".
The government has already put up 67 small oil and gas fields for auction under HELP, approved in March 2016, which is based on a revenue-sharing model as opposed to cost-and-output-based norms earlier.
The new model will replace the controversial production-sharing contract that has governed the bidding under nine earlier New Exploration Licensing Policy (NELP) rounds.
The PSC regime, which allows operators to recover all investments made from sale of oil and gas before profits are shared with the government, was criticised by India's official auditor, who said it encouraged companies to keep inflating costs so as to postpone sharing of profits.
Commenting on the development, industry chamber CII said the new licensing policy is a significant evolution of the earlier one with features such as uniform licensing for all hydrocarbons, an open acreage policy, a revenue sharing model and marketing and pricing freedom for domestic crude oil and natural gas.
"CII believes that the considered approach of HELP to address industry's concerns by simplifying and substantially de-risking the highly uncertain business of oil and gas exploration will mark a huge transition for the Indian upstream sector," a statement here said.
Oil major Cairn India's Acting CEO Sudheer Mathur said in a statement: "OALP is a fundamental shift and a transformative step in India's hydrocarbon exploration and production history."
"Single license to explore all forms of hydrocarbons, no oil cess, reduced rates of royalty are just few of the many enabling provisions which will stimulate investments in the sector," he added.
--IANS
bc/rn
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
