The Hindu Business Line : Petrofed told to rework study on exploration policy

NOT satisfied with the outcome of the study on suggesting improvements in the existing exploration licensing policy undertaken by the Petroleum Federation of India (Petrofed), the Petroleum Ministry has asked it to rework the report.

Official sources said that Petrofed has been asked to give some concrete recommendations by September 19. The Ministry felt that no concrete recommendations were made in the report and it was just a compilation of the views of the industry. Petrofed was assisted in the study by PricewaterhouseCoopers (PwC), which worked as a consultant. The Ministry had asked Petrofed to undertake the study to give suggestions for fine-tuning the New Exploration Licensing Policy (NELP). Among the other issues raised in the study was that the bid documents need to be thoroughly scrutinised so that no grey area is left. On the fiscal terms of the production-sharing contract (PSC), the study held that the Government should consider taking its entitlement of profit either in cash or kind, and that such an option should be exercised every five years.

The move to modify NELP, after comparing the position in other countries, was discussed at a CEOs' conclave under the auspices of Petrofed in July this year. The Petroleum Minister, Mr Mani Shankar Aiyar, had then said that the Government was open to suggestions for fine-tuning the existing exploration licensing policy or adopting a new policy. Petrofed was asked to coordinate a joint exercise of domestic and international firms (which are interested in such a consultation) with public sector firms to identify problems of exploration licensing and also suggest improvements. .

Before every NELP round is launched, consultations are held with all stakeholders to incorporate improvements, the sources said. This time also, suggestions emanating from the study are to be duly considered before launching the sixth round. The NELP has been in operation for eight years, with the NELP V attracting the highest number of foreign companies compared to bids in all the four previous rounds taken together.

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