The Hindu Business Line : Hydrocarbon authority to get more powers

THE Petroleum Ministry is set to strengthen the Directorate General of Hydrocarbons (DGH) by giving it more autonomy and enhancing its manpower. A Cabinet note is being finalised for this purpose, a senior official told Business Line.

The official said the Government wanted a fresh look at the role of DGH as a regulatory body, adding that the role of the directorate would be different from the functions of other regulatory bodies. As per the official thinking, the role of the DGH would be to regulate the technical aspects of the exploration and production (E&P) companies. For this, the regulator would be given more technical autonomy so that the majority of such issues could be handled directly by it without needing any clearance from the Ministry.

The DGH's role for the discovered fields is to ensure optimum exploitation; review and approve development plans, work programmes, budgets and reservoir evaluation, and advise on mid-course corrections, the official said. As far as exploration blocks are concerned, DGH appraises work programmes and monitors exploration activities. Incidentally, the V. Krishnamurthy Committee on `Synergy in Energy' had recommended that the DGH — the official organisation that oversees exploration, production and development of oil and gas fields — should be made autonomous. On the committee's suggestion to reinforce the DGH, the Ministry has proposed strengthening the functions of the DGH under the Oilfields Regulation Act, 1948 and the Petroleum and Natural Gas (PNG) Rules, 1959.

The DGH currently enjoys power under the PNG Rules to ensure that the E&P companies follow the best practices by spending minimally and by creating a level playing field under a product-sharing contract.

In fact, the Petroleum Minister, Mr Mani Shankar Aiyar, has been hinting at strengthening the DGH so that it could effectively monitor the E&P activities.

As for strengthening of the disclosure requirements for E&P companies so that market-sensitive information is not misused, the official said that a meeting between DGH and SEBI officials is expected soon. The meeting would be to apprise the capital market regulator about the technical parameters prescribed by the Government, he said, adding that the intent is to curb speculation.

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