The Hindu Business Line : DGH may have to wait to become upstream regulator

Even as the Petroleum Ministry is working towards enhancing the manpower strength of the DGH, it is in consultations with the Law Ministry for suitably empowering the DGH as a regulator for the upstream sector.

Ministry's view

The Petroleum Ministry, which has been taking a fresh look at the role of the DGH as a regulatory body, has been holding the view that the role of DGH should be different from other regulatory bodies. The role of DGH is envisaged as that of one which would regulate the technical aspects of the exploration and production (E&P) companies. This in effect would mean that it would have access to all data of E&P companies. However, some of the oil companies had feared that this might result in competitors gaining access to such information.

Technical autonomy

A senior Petroleum Ministry official said that while giving more technical autonomy to the DGH, it would be ensured that the interests of the oil companies are protected. "We are working towards developing a mechanism for the purpose," he said. Industry sources say that Petroleum Ministry has also sought views of upstream company, ONGC, on empowering DGH as an upstream regulator.

The DGH currently enjoys power under the Petroleum & Natural Gas 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.

DGH's role

The DGH's role for the discovered fields are to ensure optimum exploitation, review and approve development plans, work programmes, budgets and reservoir evaluation, and advise on mid-course corrections. 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.

Enhancing manpower

A Cabinet note is being finalised to enhance the manpower of the DGH. The Petroleum Ministry proposes to create a separate cadre for DGH. The Ministry has proposed staff strength of 235, with 50 per cent belonging to the DGH and the rest on tenure basis from public sector companies. At present, total manpower of DGH stood at 83, while its total strength was of 160. Besides, the position of Director General of Hydrocarbon would be equivalent to that of the Chairman-cum-Managing Director of a Schedule A company such as ONGC, Indian Oil Corporation.

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