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JUN 29 2017

Oil block licensing: Open acreage replaces NELP as new policy regime

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 29th JUN 2017


The government on Wednesday replaced the New Exploration and Licensing Policy with the Open Acreage Licensing (OAL) under the framework of Hydrocarbon Exploration and Licensing Policy (HELP). This replaces the controversial profit model in petroleum with a revenue share model.

OAL will allow investors looking for exploring hydrocarbons to select blocks after studying the data available through the national data repository without waiting for a formal bid round from the government.

Investors will have the option to carve out an area of their choice and submit the expression of interest for reconnaissance or petroleum operations contract. DGH will finalise the block and invite bidding biannually. Other companies can submit online and physical bids, following which bids will be evaluated and final contract will be awarded.

Union petroleum minister Dharmendra Pradhan said, "We expect OAL to accelerate exploration activity in the country."

The reconnaissance contract will be for two year extendable by one year as against the petroleum operations contract which will have exploration period of eight to 10 years and contract period of 20 years. For a given area, EOI for petroleum operations contract would be preferred over reconnaissance contract.

Companies can identify stretches through the National Data Repository (NDR) which was unveiled today. In the current round, 2.7 million square kilometres is being offered.

Nine rounds of NELP has attracted $40 billion investment so far. According to Pradhan, the total oil and gas production from NELP, however, is equivalent to just three days of oil consumption.


TOTAL Gas New Exploration Licensing Policy Oil Hydrocarbon Directorate General of Hydrocarbons New Exploration Licensing Policy Petroleum Oil and Gas Hydrocarbons

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