Govt’s ambitious exploration and licensing policy may face delays
The new licensing policy for exploration and production by the ministry of petroleum and natural gas is likely to be delayed because of later than expected regulatory clearances.
Hydrocarbon Exploration and Licensing Policy (HELP) was launched after the nine bid rounds under the New Exploration and Licensing Policy (NELP) couldn’t attract the desired investments. Under HELP, the National Democratic Alliance (NDA) government provided marketing freedom to exploration and production (E&P) companies for crude oil and natural gas in March 2016.
“The HELP project is moving very slow. Even if it is taken at fastest possible pace now, by mid-2017 the rounds will be announced. It will take another one year for bidding to happen and those who have bid will be signing contracts in another six months to one year. Any contract under HELP will not be signed before at least two and a half years,” said a top executive of one of the big four consultancy firms.
While industry players are enthusiastic about HELP, officials in the ministry said some clearances might take longer than planned.
The new policy comprises a uniform licence for exploration and production of all forms of hydrocarbon, an open acreage policy, a revenue-sharing model, and marketing and pricing freedom for the crude oil and natural gas produced.
“HELP is under progress, however, there may be some delays at the implementation level,” said an official of the ministry of petroleum and natural gas, requesting anonymity.
HELP bid rounds are scheduled to start in March 2017.
According to experts, HELP rounds are being looked at by all stakeholders because of the change in policy.“It is not only the companies which are waiting for the bid rounds to begin but also the government which wants to see the results of the change in policy,” said Dilip Khanna, partner at EY, a consultancy.
InfraCircle in October 2016 reported that the first round of HELP could be delayed because of extension of last date for submission of bids for discovered small fields.
This comes at a time when India’s hydrocarbon production has stagnated. The Narendra Modi-led National Democratic Alliance government has made energy security one of the focus areas of its economic policy in order to achieve fast and sustainable long-term development.
Currently, India imports one-third of its energy needs and ranks third globally in terms of crude import. The government, in order to reduce its import bill, has set a target to halve the country’s energy imports by 2030.
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