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Oil block auctions under Hydrocarbon Exploration Licensing Policy by early next year
India will likely begin auctioning its major oil and gas blocks early next year under its fresh Hydrocarbon Exploration Licensing Policy (HELP) that heralds a major shift from the previous policy by bringing in revenue sharing between companies and the government, offering companies the option to carve out blocks, and the freedom to market gas. “We are currently working on the procedures and the methodologies to help operationalise the new policy. his should be ready by early next year, which is when we will allow companies to bid under this,” said an oil ministry official, who didn’t want to be named.
In March, the government notified the new hydrocarbon policy, replacing the NELP, or New Exploration Licensing Policy that guided Indian hydrocarbon space for more than a decade. Some of the key changes the new policy introduced include just one license for extraction of all forms of hydrocarbons,. freedom to market gas, and a revenue-sharing system that puts an end to micromanagement by bureaucrats and the accompanying acrimony between the government and the contractor.
The officials at the oil ministry and its technical arm, the Directorate General of Hydrocarbons, are now figuring out every operational detail for a smooth launch of HELP. The oil ministry is currently managing the auction of 67 small discovered oil and gas fields for which roadshows are being organized. The policy for these small fields also offer freedom to market gas and a revenue sharing model and this bid round will test the key policy measures’ attractiveness for investors.
The experience gathered in holding the discovered small field bid round will come handy in preparing the most optimal procedure for operationalising HELP, the oil ministry official said. Once the procedure is ready, companies can submit an initial expression of interest indicating the area which they wish to take up for exploration. Following this, the government will put this area up for auction and the highest bidder will be granted the right to explore. Just because someone has first identified the area for exploration will not grant him any special right to obtain exploration license. Alexandre Texier Jersey
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