Extension of production sharing deals of pre-NELP blocks gets CCEA nod
The Cabinet Committee on Economic Affairs has approved a policy for grant of extension to the Production Sharing Contracts (PSC) signed by the government awarding Pre-NELP Exploration Blocks to enable and facilitate investment to extract the remaining hydrocarbon reserves.
The extension also includes Cairn India’s block in the Rajasthan that account for about half of the country’s onland production of crude oil.
This policy will enable the contractors to extract not only the remaining reserves but also plan to extract additional reserves by implementing new technologies.
In 2016-17 (up to February, 2017), the production from these oil and gas blocks, allotted in pre- NELP regime, is around 55 million barrel of oil and 965 MMSCM of natural gas. The recoverable reserve from these blocks is estimated to be more than 426 million barrel of oil equivalent.
During the extension period, contractors are expected to make an additional investment of more than $5,430 million.
The government’s share of Profit Petroleum during the extended period of contract would be 10 per cent higher for these fields, thus bringing additional revenues.
CCEA also approved development of 403 km of National Highways in Meghalaya and Mizoram. A government press statement said that approximately 52 km of this highway will be in Meghalaya and 351 km in Mizoram. The project will be executed in EPC mode with an estimated cost of ₹6,721 crore.
The projects will be taken up for implementation during the financial year 2017-18. Civil works are expected to be completed by 2021 and maintenance works by 2025.
CCEA also approved the fresh estimates for Deepening and Widening of Mumbai Harbour Channel and Jawaharlal Nehru (JN) Port Channel (Phase-II) at an estimated cost of ₹2,029 crore. This will be funded through the internal resources of JN Port Trust with market borrowing, if necessary.
The CCEA has also approved closure of Chhattisgarh Renewable Energy Development Agency (CREDA) HPCL Biofuel Ltd (CHBL) and IndianOil – CREDA Biofuels Limited (ICBL).
The government statement said, “All Office assets of CHBL/ICBL have been disposed of…and lands have been returned to CREDA.”