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Richa Mishra

DGH frames guidelines for ONGC, Oil India

New Delhi , Dec. 19

Oil and Natural Gas Corporation Ltd (ONGC) and Oil India Ltd (OIL) may have to follow uniform discovery disclosure norms for the blocks awarded to them on `nomination' basis. These blocks were awarded to them under Petroleum Exploration Licences (PEL) prior to the New Exploration Licensing (NELP) regime. Currently, the disclosure norms for such blocks are different from those applicable to blocks won under successive rounds of NELP bidding.

While the production-sharing contract (PSC) has provisions for disclosure of reserves for the blocks awarded under NELP and pre-NELP, guidelines are now being framed by the Directorate General of Hydrocarbons (DGH) to make applicable uniform norms for nomination exploration blocks as well. This in effect would mean that the companies would have to automatically disclose finds to competent authorities and seek their certification, official sources said.

At present, ONGC holds majority of these blocks (over 100). According to official sources, the DGH has framed guidelines and submitted them to the Petroleum Ministry for its perusal. Besides the disclosure announcements, the guidelines are also likely to propose quarterly and half yearly monitoring of the progress of work in these blocks.

Official sources told Business Line, though the DGH currently reviews PELs held by ONGC and OIL on nomination basis and monitors the progress of the work programme in these blocks, the guidelines are expected to further streamline the entire procedure.

Further, the guidelines are likely to propose that companies holding nomination blocks would have to submit an annual exploration programme to the concerned regulator. The guidelines are also expected to outline how the report should be submitted, parameters to be followed by the companies, and the time line for conducting the activities. The companies would be required to submit a development plan for the new discoveries.

The Government had on September 1 notified that the DGH would monitor the upstream petroleum operations in the country including coal bed methane and gas hydrates operations. The DGH would also review and monitor the exploration programme and development plans for commercial discoveries of hydrocarbon reserves, review the reserves discovered, and lay down norms for declaration or announcement of discoveries.

The Standing Committee on Petroleum & Natural Gas in its report on `Activities of Directorate General of Hydrocarbons - A review' to Lok Sabha recently had asked the Government to direct ONGC and OIL to accelerate pace of exploration activities in these blocks and to complete the process before the deadline to ensure that these nomination blocks are not relinquished without valid reasons.

The Committee also recommended strict adherence to provisions of PSC regarding announcement of discoveries as pre-mature announcement of discoveries have a bearing on the value of the company stocks, thereby affecting investors. As regards the nomination blocks awarded to ONGC and OIL, it felt that the Government should finalise and put in place similar norms at the earliest.

More Stories on : Petroleum | Regulatory Bodies & Rulings | Oil & Natural Gas Corporation Ltd

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