Bharat SainiLast Updated on June 14, 2018 by Bharat Saini
Hydrocarbon Exploration Licensing Policy (HELP) has undergone a major policy change that now allows Finance and Petroleum Ministers to award Oil and Gas Exploration Blocks to successful biddersafter International Competitive Bidding (ICB) based on the recommendations of Empowered Committee of Secretaries (ECS). This approval for delegating powers was given by Cabinet Committee on Economic Affairs (CCEA) on Wednesday April 11, 2018 in line with the government initiative of ease of doing business, whereas earlier CCEA’s approval was necessary for awarding blocks. The move is expected to fast-track the process of awarding Oil and Gas Exploration Blocks to successful bidders under the HELP.Under HELPtheBlocks are awarded twice in a year.
HELPapproved earlier by the Union Cabinet, Chaired by Prime Minister NarendraModi on March 10, 2016 was aimed at enhancing transparency and reducing administrative discretion that would enhance domestic Oil and Gas production, bring substantial investment in the sector and generate sizable employment.HELP replaced the earlier New Exploration Licensing Policy (NELP) that had been applicable since 1997-98. HELP was announced by Government of India in line with the Prime Minister’s goal of reducing import dependency on Oil and Gas by 10% by 2022 and to promote ease of doing business in the oil and gas sector in India. This policy aims to augment domestic production of Petroleum and expedite the appraisal of Indian sedimentary basins by providing Investors a ready access to huge amount of Geo-scientific data available in National Data Repository (NDR), flexibility to carve out exploration acreages through an open acreage licensing process and increased operational autonomy through a new Revenue Sharing model.Under the new regime, the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas etc.
Four main facets of HELP:
- Uniform license for exploration and production of all forms of hydrocarbon,
- An open acreage policy,
- Easy to administer revenue sharing model and
- Marketing and pricing freedom for the crude oil and natural gas produced.
Salient Features of HELP:
- Unified Licence for both conventional and unconventional Hydrocarbons.
- Transition from Cost Recovery mechanism to a Revenue Sharing Mechanism.
- Open Acreage Licensing Policy allows bidders to carve out their own blocks by studying data at National Data Repository.
- Low regulatory burden.
- Market pricing and free market access.
- Exploration rights on all retained area for full contract life.
- EoIs can be made round the year with bidding rounds at 6 monthly cycles.
