Policy Initiatives to Enhance Oil and Gas

Government of India has taken several policy initiatives as well as administrative measures to enhance production of oil and gas in the country for meeting domestic demand. The policy initiatives can be mentioned as:

i. Policy for Relaxations, Extensions and clarifications under Production Sharing Contract (PSC) regime for early monetization of hydrocarbon Discoveries.

ii. Policy on Testing Requirements.

iii. Discovered Small Field Policy.

iv. Policy for marketing freedom for gas production from difficult areas.

v. Policy for exploration in Mining Lease Area.

vi. Hydrocarbon Exploration and Licensing Policy.

vii. Policy for Extension of Production Sharing Contracts.

viii. Shale Gas Policy etc.

Some of the administrative steps taken by the Government are:

i. Setting up of National Data Repository.

ii. Appraisal of Unappraised area in Sedimentary Basin.

iii. Streamlining of functioning of Management Committee for timely approval of Work Program and Budget in PSC regime.

iv. Re-assessment of Hydrocarbon Resources.

The Government has decided that Oil PSUs may formulate policies for import of crude oil in their best commercial interest and in accordance with the extant guidelines of the Central Vigilance Commission etc. Therefore Public Sector Oil Marketing Companies (OMCs) procure crude oil as per Crude Import Policy. Crude Oil is procured on term and spot basis from NOCs and other registered parties with OMCs. There is no restriction on import of Liquefied Natural Gas (LNG).

Under Pre-New Exploration Licensing Policy (Pre-NELP)/NELP, exploration blocks were awarded through Competitive Bidding Process for carrying out Exploration & Production activities. In various rounds of biddings held under Pre-NELP/NELP, Private/JV companies had also participated alongwith the National Oil Companies (NOCs).

Based on the experiences of implementation of NELP and to simplify contractual regimes, Government has recently announced ‘Hydrocarbon Exploration Licensing Policy (HELP)’ with the objective to enhance domestic oil and gas production.

In addition to above, to enhance oil & gas production in the country and inviting private investment, a policy named as ‘Discovered Small Field Policy’ has been approved by the government, envisaging auctioning of 67 small/marginal fields of ONGC and OIL through International Competitive Bidding.