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Ease of Doing Business: Petroleum, Finance Ministers Get Govt’s Approval to Award Blocks

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In line with the government initiative of ease of doing business, the Union Cabinet chaired by Prime Minister Narendra Modi has given approval for delegating powers to Minister of Petroleum and Natural Gas and Finance Minister to award the blocks/contract areas to successful bidders under Hydrocarbon Exploration and Licensing Policy (HELP), a ministry statement said. The decision came after International Competitive Bidding (ICB) based on the recommendations of Empowered Committee of Secretaries (ECS). Under HELP, blocks are to be awarded twice in a year. Therefore, delegation of powers will expedite the decision making process on awarding blocks and give a boost to the initiative of ease of doing business, the Ministry of Petroleum and Natural Gas said.

Under the New Exploration Licensing Policy  (NELP), ECS considers the Bid Evaluation Criteria (BEC), conducts negotiations with the bidders wherever necessary and make recommendations to CCEA on award of blocks. The CCEA approves the award of blocks. The entire process, including Inter Ministerial Consultations (IMC) is quite lengthy and time consuming. In consonance with the government initiative of ‘Ease of Doing Business’, it is desirable to shorten the duration of time taken forward of the blocks/contract areas. Under the New Hydrocarbon Exploration and Licensing Policy, the competitive bidding will be continuous and blocks will be awarded twice a year.

The government of India had launched a new policy regime for Exploration & Production (E&P) sector — Hydrocarbon Exploration and Licensing Policy (HELP) — in 2016 which is paradigm shift from earlier policy regime. The main features of new policy are revenue sharing contract, single licence for exploration and production of conventional as well as unconventional hydrocarbon resources, marketing & pricing freedom, etc. Open Acreage Licensing Policy (OALP) under HELP, is main innovative feature wherein investor can carve out blocks of their own interest and submit an Expression of Interest (Eol) throughout the year. Based on the areas for which expression of interest has been expressed bidding will be conducted every 6 months.

The government had received an overwhelming response in first Eol cycle of OALP which started on July 1, 2017 and closed November 15, 2017. In the first bidding round, 55 blocks, having an area of 59282 spreading across 11 states have been offered for bidding. The bidding process is being handled through a secured and dedicated e-bidding portal.

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