India Switches To Liberal Regime For Oil, Gas Exploration
India has joined a select league of nations that offer areas for exploration and production of oil and gas round the year on liberal fiscal terms, including marketing and pricing freedom.
Oil Minister Dharmendra Pradhan on Wednesday inaugurated India’s maiden National Data Repository (NDR), which stocks information on hydrocarbons prospects of 3.14 million sq km of sedimentary basins.
With this, India has switched over to the Open Acreage Licensing (OAL) regime where companies can choose areas they want to explore, he said.
Under OAL, companies can visit NDR and look at vast seismic data of currently producing fields and explored areas as also those of unexplored areas. From the areas that are not under any licensee, they can then carve out an area suitable to them and evince interest in doing exploration and production.
Once an area is selected, the government will put it up for bidding and any firm offering the maximum share of oil or gas produced from the area would be awarded the block, he said.
Till now, the government has been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round.
Pradhan virtually dubbed the New Exploration Licensing Policy (NELP), under which 256 blocks have been offered for exploration and production since 2000, as a failure, saying “the total production of oil and gas from NELP blocks is equivalent to only 3 days of India's oil consumption.”
With the experience of several litigations and not very encouraging production output from NELP rounds, we decided not to go for incremental policy change but to have a completely new policy.Dharmendra Pradhan, Oil Minister
The last bid round under NELP happened in 2010. Areas will be offered for picking from July 1, he said.
The first set of areas or blocks that get interest are likely to be put up for auction by November, with bids closing by December-end.
The blocks would be awarded by January-end, he said.
Already a vast amount of data has been populated: over 9.3 lakh line kilometres of 2D seismic, 2.8 lakh square km of 3D seismic and 1,717 well data.
The NDR will store data online, near line and offline, and provide independent web-based access.
There are some 90 countries around the globe having NDRs but the volume of data in Indian NDR puts the country in top 10, said Atanu Chakrabotry, Director General, Directorate General of Hydrocarbons (DGH).
The DGH has already begun sale of geophysical data of speculative surveys in east and west coast of India in 2005 and 2008. Till now, the government has awarded 254 exploration blocks under nine rounds of bidding between 2000 and 2012.
Prior to that, 29 discovered fields were awarded to private and foreign companies.
Of the 254 blocks awarded under NELP between 2000 and 2012, 156 have already been relinquished due to poor prospects.
The mammoth volume of data collected by E&P companies and other agencies over more than six decades of activities was hitherto lying scattered at different work centres of Oil & Natural Gas Corp. Ltd., Oil India Ltd. and DGH or held by the operating companies.
This necessitated an establishment of a system at national level that could assimilate, preserve and upkeep the vast amount of data which could be organised and regulated for use in future exploration and development, besides use by R&D and other educational Institutes.
With this objective, the government initiated the establishment of the NDR.
The NDR is a government sponsored project with state-of- the-art facilities and infrastructure to create E&P data bank for preservation, upkeep and dissemination of data so as to enable its systematic use for future exploration and development.
DGH, being the central government agency, will be responsible for creation, setting up and operation of the NDR.