The Hindu Business Line : New disclosure norms for oil, gas exploration cos in the pipeline

THE Directorate-General of Hydrocarbons (DGH) is expected to come out, within a month, with a new set of disclosure guidelines for oil and gas exploration companies operating in India.

In the recent past, some of the companies active in this field have come out with claims of oil and gas finds and this is seen as an attempt to influence existing or potential investors.While making such announcements some of the companies have taken shelter in the norms prescribed in the countries they belong too, a DGH official said, adding that "the product sharing contract (PSC), which they enter into with Indian or multinational companies, gives them the leverage of announcing the discoveries made by them."

However, the PSC does not allow them to announce the commercial aspect of the discovery, he explained.

The new norms are likely to allow them to announce the discovery, but with a caveat that the companies will have to state that `commerciality of the find is yet to be proven'. This may bring in more transparency.The Government has initiated the process of streamlining the existing norms for market-sensitive announcements made by the oil and gas companies, which even now are required to get a certification from the DGH. However, the companies were seen to be making the claims without waiting for the DGH certification.

In fact, the DGH is understood to have taken up the issue with SEBI.According to a senior Petroleum Ministry official, the market regulator should ensure that the companies make correct disclosures. The purpose behind the exercise is that each stakeholder sticks to his commitment as well as the process is made more investor-friendly, so that an average investor knows the exact status of the find, the official said.

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