The Hindu Business Line : Petrofed report submitted to Aiyar — Oil exploration, production cos seek policy changes

Mr Mani Shankar Aiyar (right), the Minister for Petroleum and Natural Gas, handing over the `Review of E&P Licensing Policy' to Mr S. C. Tripathi, Secretary. Also seen is Mr A. K. Arora, Director-General, Petroleum Federation of India, in the Capital on Monday. - Kamal Narang

New Delhi , Sept. 19

COMPANIES involved in exploration and production (E&P) activities have sought certain policy changes to make investment in the hydrocarbon sector more attractive. This has been conveyed through a paper on `Review of Indian Exploration & Production Licensing Policy' to the Petroleum Minister, Mr Mani Shankar Aiyar.

Some of the major suggestions in the paper, submitted by the Petroleum Federation of India (Petrofed), are transition into open acreage licensing policy, requirement of a National Data Repository, offering different awards terms and production sharing contract (PSC) terms for different types of blocks offered, and to put in place an upstream regulator.

As the policy change may take 2-3 years to materialise, the report has suggested that the current periodical bidding rounds under the New Exploration Licensing Policy (NELP) should co-exist.

Based on the comments received from the companies, the report concluded that the there was a need to offer different award terms and PSC terms for different types of blocks - onland, frontier, deep-water, ultra-deep water, shallow water, and poorly explored. Currently, it is the same methodology followed for all blocks.

To encourage competitive environment, an independent upstream regulator needs to be in place, the report said. The need for independent upstream regulator was felt whenever issues relating to licensing policies, appraisals, reviews, approvals and operations were taken up.

Companies consider it risky to bid for blocks in countries with inadequate or poor quality data. In order to address to the sensitivity of companies to "both above-ground and below-ground risks", the report has suggested that a multi-pronged approach be adopted over and above the current periodical "all-risk" awards, and other geo-seismic data acquisition efforts by the Government.

Concurrent to the periodical rounds, the report has suggested that contracts be awarded for data acquisition at no cost to the Government such as technical evaluation contract (TEC), non-exclusive speculative survey (NESS), and promote licence (PL).

The Petrofed report states that almost every company supports the open acreage licensing process. The report also suggests creation of National Data Repository (NDR).

It is imperative that a NDR be created under the Ministry to be the repository of all data generated in India. Further, to enable proactive evaluation of companies, this NDR should be accessible online, the report said.

The Government may solicit inputs from companies on quarterly basis for identification of blocks.

Such blocks may be announced for others to express interest and awarded quarterly on competitive basis, the report said.

Small and medium discovered fields might be offered to companies with low risk appetite, it added.

Meanwhile, the Petroleum Minister, Mr Mani Shankar Aiyar, today said that the Government would launch the sixth round of bidding for oil and gas blocks under the NELP as scheduled in January 2006.

"NELP-VI will be off the ground in January," he said on the sidelines of the Petrofed seminar on `Review of Exploration and Production Licensing Policy'.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page