National
Hydrocarbon exploration: DGH to be single window for nod to contractors
These proposals were cleared by the Union Cabinet on Tuesday while approving changes in the Hydrocarbon Exploration and Licensing Policy (HELP) and will be notified soon.
To fast-track the process of approvals for contractors of hydrocarbon fields, the government has decided to form a committee, headed by the Cabinet secretary, which will monitor the development work undertaken by the contractors right from the beginning.
Also, the directorate general of hydrocarbons (DGH) will act as a single window for contractors for obtaining approvals. In addition, contract terms for blocks in unexplored basins will also be eased.
These proposals were cleared by the Union Cabinet on Tuesday while approving changes in the Hydrocarbon Exploration and Licensing Policy (HELP) and will be notified soon.
The Cabinet approved to incentivise contractors to go into unexplored areas wherein they will not have to pay a share of revenue to the government, unless windfall gains are made and require to pay only royalty and other statutory levies. For unexplored areas of producing basins, the bidding will continue to be based on the revenue sharing basis but more weightage will be given to work programme. Also, an upper ceiling of 50% on biddable revenue share has been prescribed apart from marketing and pricing freedom for those new gas discoveries whose field development plans are yet to be approved.
The Cabinet also decided to bid out 64 fields of ONGC and 2 fields of Oil India to private companies. These fields contribute 6% to the companies’ combined production in order to step up output. The state-run companies will get lease rentals.
“The committee under the Cabinet secretary will approve inter-ministerial requirements such as environment clearance and forest clearance. Members of the committee will be from the concerned ministries so that proposals are expedited in a time-bound manner,” said a government official.
The DGH will also be given the responsibility to act as single touchpoint for proposals on behalf of contractors and will pursue the proposals with the committee as well as other state departments. At present, a contractor is required to take approval from the concerned departments and state agencies themselves.
“While DGH will pursue the matter with all concerned departments, in case of hiccups it will approach the committee which will constantly monitor progress of proposals,” added the official.
The combination of the committee and delegation of responsibility to DGH will be notified separately.
For areas under basins in category 2 and 3, which are unexplored areas and prospects have not been proven, the government also plans to change the contract terms. While at present, a contractor needs to go to the DGH’s management committee (MC) to take approvals. “Since there is no revenue sharing, the hassles of going to MC will be reduced. For instance, work programme will need not be approved by MC which is the process now. They will have freedom to take financial decisions and just an intimation will do. No need for formal approval,” said the official.
The Empowered Committee of Secretaries comprising of secretary (petroleum & natural gas), secretary (expenditure) and law secretary will approve the new contracts terms for category 2 and 3.