More E&P entrepreneurs
India wants to bring in more entrepreneurial ventures into the Exploration & Production sector, as well as international investors to industrialize the energy producers.
“In line with government’s policy on Maximum Government, Minimum Governance, we want to bring in more entrepreneurial ventures into the E&P sector,” Dharmendra Pradhan, Minister of State (I/C), Ministry of Petroleum and Natural Gas, in Singapore on September 9, 2016.
He also wants major investors in the downstream sector for the development of refineries and petrochemical plants.
“We recognize that the need of the hour is to increase the domestic energy production by unlocking India’s hydrocarbon potential. We strongly believe that sustainable increase in the domestic production of oil and gas will not only counter the energy constraints that we face, but also make us self-sufficient in meeting our energy needs,” he stressed during the launch of road show on Discovered Small Fields in Indian hydrocarbon basins in Singapore.
A key step of the larger plan to ensure “Energy Security” for the country, he said, pointing to the government goal of reducing crude oil imports by 10 per cent by 2022. Crude oil imports currently accounts for 70-75 per cent.
“Aligned with its cherished goal of enhancing indigenous production of crude oil production, the Government has come up with a new policy – Hydrocarbon Exploration and Licensing Policy (HELP),” he said.
HELP is a market driven policy framework which focuses on providing operational flexibility to the market players, and strives to make the systems more efficient as well as effective.
The salient features of HELP include:
• A single uniform license will be issued for exploration and development of both conventional and unconventional hydrocarbon prospects.
• A shift from the earlier production sharing contract model to a simpler and easier revenue sharing contract providing significant operational flexibility to the contractor.
• Free access to market
• Pricing Freedom for crude oil and natural gas produced from new fields in a transparent manner to further promote oil and gas assets across the country.
In addition to this, last two years saw major reforms in the oil and gas sector primarily towards re-engineering of the E&P sector with the introduction of New Domestic Gas Pricing Guidelines, reforms in existing contracts, incentivizing gas production from difficult areas such as HPHT reservoirs, deepwater and ultra-deepwater areas along with calibrated marketing freedom for these areas.
In fact, the current bid round is also being held under revised set of industry friendly bid guidelines and processes with the Discovered Small Fields acting as the regulatory framework.
This is the first time after 1990s that India is are offering discovered fields for bidding.
Under the bid round:
• 67 fields in 46 contract areas, across 9 sedimentary basins are being offered to potential investors through International Competitive Bidding in the oil and gas producing basins.
• Of these 67 fields, 36 are located in offshore areas and 31 fields are in onland basins.
• The field have estimated 625 Millions Barrels of Oil and Oil Equivalent GAS (O+OEG) in place volumes, and are spread over 1500 square kilometers in 26 onland, 18 shallow water and 2 deep water areas comprising around 20% of the area under Production Sharing Contract (PSC) regime.
This bid round offers a chance to invest in these discovered small fields with no signature bonus and no mandatory work program for exploration and development; besides many fiscal incentives.
The new policy is based on the Revenue Sharing Contract Model which replaces the earlier Production Sharing Contract Model with the aim of simplifying the operating regime and making it more transparent.
In order to facilitate the interested bidders, physical data centers with interpretation facility have also been set up.
“Our focus is on simplifying policy hurdles and improving the overall ease of doing business in the country,” said Pradhan. fii-news.com
