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  • Context (PIB): The Ministry of Petroleum and Natural Gas initiated the 9th bidding round under the Open Acreage Licensing Policy (OALP).
  • OALP was launched in 2016 under Hydrocarbon Exploration and Licensing Policy (HELP).
  • Under the Open Acreage Licensing Policy, Companies can put in an Expression of Interest (EoI) for any area throughout the year but such interests are accumulated thrice in a year.
  • The Government will examine the interest and if it is suitable for award, then the government will call for competitive bids after obtaining necessary environmental and other clearances.
  • Successful implementation of OALP requires building of National Data Repository.

National Data Repository (NDR)

  • Operational since 2017, it is a centralized database of geological and hydrocarbon information.
  • It provides reliable exploration and production data allowing potential investors to make informed decisions.
  • It functions under Ministry of Petroleum and Natural Gas.

Hydrocarbon Exploration and Licensing Policy

  • Approved in 2016, it replaced the erstwhile New Exploration Licensing Policy (NELP).

Main aspects of HELP

  • Open Acreages: Freedom to investors for carving out blocks of their interest (OLAP).
  • Single, uniform licensing system to cover all hydrocarbons (ie. Conventional and Unconventional hydrocarbons) under a single licensing framework, instead of the present system of issuing separate licenses for each kind of hydrocarbons.
  • Shift to Revenue sharing model from profit sharing model/production sharing contract model (PSC).
  • Marketing and Pricing Freedom: Only subject to a ceiling price limit.
  • Conventional hydrocarbons: oil, gas.
  • Unconventional hydrocarbons: Coal bed methane, Gas Hydrates, Oil sands, shale oil etc.

Revenue Sharing Contracts Model

  • It is seen as a better alternative to OALP and NELP.
  • The government gets a share in revenue from the very beginning.
  • In contrast, PSC (Production Sharing Contracts) allows the government to have revenue share only after costs are recovered by the explorer.
    • In PSC, explorers inflate investment by classifying revenue expenditure (salaries, maintenance etc.) as capital expenditure (equipment, technology, etc.).
    • This resulted in a lower government share & delays revenue to the government by decades.
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