August 2020 2010 1997 1948 Earlier Policy Regimes in EampP Sector 1991 Beginning of deregulation 28 producing fields and 28 exploratory blocks offered including private players Small ID: 1028537
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1. Policy Initiatives in Indian E&P SectorAugust 2020
2. 201019971948Earlier Policy Regimes in E&P Sector1991Beginning of de-regulation 28 producing fields and 28 exploratory blocks offered including private playersSmall Localized Industry1995Approval of New Exploration Licensing Policy (NELP)Formulation of CBM policyLiberalization of E&P Sector (1997- 2009)9 NELP and 4 CBM rounds;254 exploratory and 33 CBM blocks through competitive bidding
3. A Slew of Transformative Initiatives in last 5 years2020Marketing & Pricing Freedom for gas production from difficult fieldsDiscovered Small Field PolicyNational Seismic ProgrammeNational Data RepositoryHydrocarbon Resource Re-assessmentHydrocarbon Exploration & Licensing Policy (OALP Bid Rounds)Marketing & Pricing Freedom for CBMStreamlining working of PSC Policy Enhanced Recovery PolicyProduction Enhancement ContractSetting up Alternate Dispute Resolution Committee 2014
4. Concerted Efforts to Enhance Domestic ProductionRevenue sharing model instead of Profit sharingSingle license for all types of hydrocarbonsOption to carve out acreages of choice Full marketing and pricing freedom Hydrocarbon Exploration & Licensing Policy (HELP)Geoscientific Data Initiatives Hydrocarbon Resource Reassessment StudyNational Data RepositoryNational Seismic ProgrammeDiscovered Small Fields (DSF)Already discovered hydrocarbon potentialPrior Technical experience not a pre-qualification criteriaNo Minimum Biddable Work ProgramFull Pricing & Marketing Freedom
5. Geoscientific Data Initiatives to Enhance Data AccessHydrocarbon Resource Reassessment Study (2017)National Seismic Programme49.1% increase in Hydrocarbon resource estimateas compared to 1995As on January 2020, ~43,952 LKMdata acquired and is being progressively uploaded on NDRLaunched to conduct assessment of unapprised areas for potential O&G reserves*As on Jul 2020**The Hydrocarbon Resource Reassessment Study was conducted in 2017 for 26 sedimentary basins.National Data Repository*Undiscovered HydrocarbonsDiscovered Hydrocarbons49.1%29,79612,0762D Seismic Data: 2.455 Million LKM 3D Seismic Data : 0.832 Million SKMWell and log data: 18,429 nos. Well Reports: 37,600 nos. Seismic Reports: 14,514 nos. 256 Companies820 Users**Govt. is also keen on conducting National Exploration Data Mission to further strengthen the geological database of the country.
6. Reduced and graded royalty ratesSingle uniform license for all types of hydrocarbonsOption to carve out acreages of choice Full marketing and pricing freedom of gas Pre-determined Liquidated Damages (LDs)Revenue sharing model instead of Profit sharingNew HELP Regime under Revenue Sharing ContractAcreage under OALP (Round I-V*)Blocks Awarded* 1,56,579*Sq. Km. 105*Committed investment ~2.37 USD BillionFive Bid Rounds Successfully Completed‘Hydrocarbon Exploration and Licensing Policy’ (HELP) introduced on 10th March, 2016 focusing on reducing administrative approvals and delays, enhancing transparency, decreasing disputes* 11 Blocks under OALP Bid Round-V are under process of award.
7. Liberalized Bidding Pattern under HELPCategory-I BasinsCategory- II & III BasinsParametersPrevious LiberalizedWeightage to work Programme50%70%Capping on Revenue share Quote at HRPNo capping50% cappingConcession in RoyaltyNo concessional rate for early productionBy 10%*ParametersPreviousLiberalizedWeightage to work Programme50%Incremental revenue share applicable only in case of windfall gains above annual revenue USD 2.5 BnCapping on Revenue share Quote at HRPNo cappingConcession in RoyaltyNo concessional rate for early productionCategory II: 20%*Category III: 30%* (Applicable only if production commenced within 4 years for Onland/Shallow water blocks and 5 years for Deepwater/Ultra-Deepwater)
8. Bidding through Secure and Transparent e-Bidding PortalSigning and encryption using Class III Digital SignatureProvision of online tender fee payment24X7 facilitation support is available to bidderseBidding URL - https:/ebididng.dghindia.gov.inBid evaluation & declaration of resultProvision to revise or change your bid before bid closing datePreview & submission of bidRegistration using PAN (Indian) & CIN or equivalent (Foreign)Fulfillment of qualification criteria both financial & technicalFormation of ConsortiumBid parameter quantum for CWP and quote for GoI revenue share at LRP & HRPCWP : Committed work programme | LRP: Lowest Revenue Point | HRP: Highest Revenue Point Mapping of DSC is required for signing and encryption of Data submitted by Bidder
9. Approval of Management Committee not required for FDP, notification of discoveryContractual SimplificationsFurther Reforms to Improve Ease of Doing BusinessEmpowered Coordination Committee (ECC)Setting up of ECC under chairmanship of Cabinet Secretary for expediting process of approvalsExemption from seeking Environmental clearanceGovt. exempted O&G firms, looking to conduct exploratory drilling in B2 category, from seeking an environmental clearance for onshore/offshore blocksAlternate Dispute Resolution mechanismGovt. constituted Dispute Resolution Committee to expedite resolutionSingle Window ClearanceConnects upstream companies to different arms of government, allows electronic filing of applications, sharply cuts time taken in obtaining clearancesOnline Contract Management SystemOnline ‘Contract Management System’ to ensure hassle free and transparent contract compliance
10. Proposed Offshore Exploration and DevelopmentSalient Features of Proposed Offshore SchemeStability in fiscal terms/ fiscal obligations for entire lease period . Single Composite Lease – Thirty (30) years extendable for ten (10) years at a time up to the economic life of field. Set off of CWP shortfall LD liability allowed against the cost of appraisal/development wells. Maximum Acreage & Committed Investment-Pre-approved statutory clearances/approvals/permissions.Clearance stability/ Investor Protection. Risk of Expropriation mitigated. Block TypeMax. Acreage(sq.km)Shallow Water10,080Deep/ Ultra-Deep Water16,800Max. acreage is irrespective of Basin Category.Exploration Period rationalized. Lease Period comprising six (6) years of Exploration Period extendable up to two (2) years. Basin CategoryAcreage(sq.km)Min. Investment(million usd)Cat-I2,000100Cat- II & III4,000125Additions in minimum investment
11. Government has announced IOR/EOR policy to leverage technologies to improve hydrocarbon output using secondary and tertiary recovery methodsEnhanced Recovery (ER) Policy50% waiver on cess for oil, 75% waiver on royalty for gasER incentives after the approval of screening committeeHydraulic fracking and acid fracking shall be consideredApplicable across all contractual regimes and nomination acreagesFiscal incentive applicable on incremental production for conventional hydrocarbonFiscal incentive applicable on entire production for unconventional hydrocarbonIR incentives on reaching a set benchmark
12. Discovered Small Fields (DSF) PolicySingle License for Conventional & Un-conventional HydrocarbonExploration allowed during entire contract periodPrior Technical experience not a pre-qualification criteriaRoyalty in-line with HELP and no CessNo Minimum Biddable Work ProgramProvision for sharing of common facilitiesFull Pricing & Marketing Freedom53 blocks awarded2371409On landOff shore3,777 Sq. km. awarded~235 MMTIn place Hydrocarbon reserves in blocks awardedTwo Bid Rounds Successfully Completed
13. India Provides Huge Potential and Conducive Business Environment for Exploration and Production Hydrocarbon Exploration and Licensing Policy (HELP)Other Recent Policy Reforms DSF RoundsPolicy Framework for Enhanced Oil & Gas RecoveryIntroduced revenue sharing mechanism, thereby, reducing regulatory burden of cost auditingProvides single license for all hydrocarbons with full freedom for marketing & pricingGraded royalties and other fiscal incentives improving project viabilityAllows bidders to carve out their own blocks Five OALP rounds completed successfully having 105* blocks with total acreage of 1,56,579* sq. km For Category II & III sedimentary basins, 100% weightage for Minimum Work Programme 70% weightage to Minimum Work Programme for Category I basinsFiscal concessions for early monetization and commercial productionNOCs allowed to induct private sector partners; 64 marginal fields bid out recently by ONGC to raise output beyond pre-agreed baselineDSF rounds attracted investors to the small and isolated fields with already discovered hydrocarbon potentialHuge success of DSF I and II rounds with award of 53 blocks having total area of 3,777 sq. kmGovernment introduced IOR/EOR policy to leverage technologies to improve hydrocarbon output using secondary & tertiary recovery methods in ageing fieldsApplicable across all contractual regimes & nomination acreagesFiscal incentive applicable on incremental production for conventional hydrocarbon and entire production for unconventional hydrocarbon* 11 Blocks under OALP Bid Round-V are under process of award.