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Open Acreage Licensing Policy

Posted on August 9, 2021 by admin1  176

In News

  • Recently, the Oil Ministry launched the sixth bid round of the Open Acreage Licensing Programme.

About

  • Under this, 21 blocks, with an area of approximately 35,346 sq km are on offer to investors.
  • These 21 blocks are spread across 11 Sedimentary Basins and include 15 Onland blocks, 4 Shallow Water blocks and 2 Ultra Deep Water blocks. 
  • Category wise, there are 12 blocks in Category-I basins, 4 in Category II basins and 5 in category-III basins.

Open Acreage Licensing Policy (OALP)

  • It is the most crucial part of the Hydrocarbon Exploration and Licensing Policy (HELP).
  • It provides a single, uniform Licence for exploration and production of conventional as well as unconventional hydrocarbon resources.
  • The Freedom to carve out acreages of choice under OALP bid rounds has been given to contractors.
  • The revenue-sharing model is used for offering fields.
  • Producers have complete marketing and pricing freedom for crude oil and natural gas produced.
  • Procedure for allotment under OALP:
  • Under the OALP, first, an explorer selects areas after evaluating the National Data Repository (NDR) 
  • He then submits an Expression of Interest (EOI). 
    • Such EOI can be submitted thrice a year
  • This field is put up for competitive bidding and the entity offering the maximum share of oil and gas to the government is awarded the block.

Benefits of OALP

  • Removing red-tapism: 
    • It has reduced multiple licences and procedures for extracting different hydrocarbons even from the same well.
  • Brought in a quantum jump in the Exploration & Production sector:
    • The successful roll-out of the HELP regime, followed by OALP Bid Rounds, has led to an increase in exploration acreages in India.
    • The exploration acreage stood at about 80,000 sq. km. the HELP regime.
      • Now, it has increased to approx. 2,37,000 sq. km., post the award of blocks under OALP Round-V in 2021.

National Data Repository (NDR)

  • It is a government-sponsored exploration and production (E&P) data bank. 
  • It has state-of-the-art facilities and infrastructure for preservation, upkeep and dissemination of data.
  • Data that is being stored in NDR: Seismic Data, Well & Log Data, Spatial Data, other data like Drilling, Reservoir, Production, Geological, Gravity & Magnetic etc.
  • Data received through the National Seismic Programme, an in-depth study of 26 sedimentary basins, are continuously being added to the NDR.
  • Aim: To provide explorers’ data on the country’s repositories, allowing the companies to choose fields according to their capabilities.
  • Benefits of NDR: 
    • Helped in enhancing prospects of petroleum exploration 
    • Facilitated the Bidding Rounds by improving the availability of quality data.

Concerns Related to OALP

  • Lesser involvement of Private Players:
    • Public Sector Companies like Oil and Natural Gas Corp (ONGC) and Oil India (OIL) are the major winners of the bidding rounds.
  • Lack of clarity in Government Policy and Regulations 
  • Higher Tax and Cess:
    • Proposal by the Petroleum Ministry to reduce the oil cess charge on domestic production of crude has been rejected by the Finance Ministry.
  • Less Participation of Foreign Companies:
    • Indian attempts to attract Foreign Energy Giants are not yielding expected results.

Way Ahead

  • Rationalise Taxation and Cess.
  • Consult different stakeholders for their concerns.
  • Timely and detailed guidelines.
  • Incentivise the Private and Foreign Players to bring in better technology.

Hydrocarbon Exploration and Licensing Policy (HELP)

  • HELP was brought in March 2016 replacing the erstwhile New Exploration Licensing Policy (NELP) 
  • It had 2 key drivers
    • The Open Acreage Licensing Programme (OALP) 
    • The National Data Repository (NDR) 
      • Both were launched in June 2017
  • Aim:   To accelerate the Exploration and Production (E&P) activities in India.
  • The main features of HELP are 
    • Revenue Sharing Contract.
    • Single, uniform Licence for exploration and production of all Hydrocarbon resources.
    • Choice with Bidder to carve acreage.
    • Marketing & pricing freedom.
  • Need of the Policy:
    • India is the 3rd largest consumer of crude oil and petroleum products.
    • Oil and gas contribute nearly 34.4% to primary energy consumption.
    • In 2015-2016, India’s crude oil import dependence rose to 81% from 78.5%. 
    • India was seeing an overall decline in the exploration and production of conventional resources.

HELP

NELP

Revenue Sharing Contract

Production Sharing Contracts: Based on Profit Sharing.

Profit or loss is not a concern of the Government. Hence less Red tape is there.

Red tapism as the Government wanted to calculate the input cost of explorers and extractors.

Single Uniform License

Different Licences

Source: Business Standard

 

 
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