India’s hydrocarbon exploration will come under the guidelines of the Open Acreage Licensing (OAL), which allows companies to cherry-pick their own areas for exploration from July 1. OAL, a policy initiative of the previous United Progressive Alliance government, will be offered under the Hydrocarbon Exploration Licensing Policy which is set to replace the New Exploration Licensing Policy (NELP).
The source reported that following a trial run, an official found OAL to have the potential to attract multinational corporations like Exxon. Such companies have been keeping India low on their exploration priority list. Unlike NELP, which was based on cost recovery, OAL will work on a revenue-sharing model. The OAL was intended to cut the red tape and plug the gaps in the NELP model, a senior official in the Ministry for Petroleum and Natural Gas told the source. The OAL will offer 2.7 million sq km out of the total 3.14 million sq km in the Indian Sedimentry Basin, available in the National Data Repository (NDR), he said
Companies can submit their EoI (expression of interest) till November 15, and within a month, the notice of inviting offer. Consequently, the NDR will be made operational immediately and OAL will roll out from July 1, on the expression of interest basis said the official. Contracts awarded under the NELP would continue to co-exist with OAL after July 1. Only those areas that have been surrendered or not already awarded are being put on offer in OAL, the official said.
The government also hopes to win back the trust of the companies in the business as it will allow the players to choose their own areas and carve out their own blocks with pricing and marketing freedom.