The Union Government of India has taken an exceptional step towards ensuring smoother coordination among different ministries and state governments involved in the hydrocarbon exploration process. A distinctive panel is established to enhance the cooperation between the Ministry of Petroleum and Natural Gas (MoPNG), the Ministry of Environment and Forest and Climate Change (MoEFCC), and the respective state governments. This initiative will not only help to expedite hydrocarbon exploration-related permissions but will also aid in resolving several ongoing issues.
The Role of Panel and Its Composition
The central role of this panel is to mediate and solve various conflicts between MoPNG and MoEFCC. One such standing dispute is regarding the categorization of “exploration.” Quite a few industry players, as well as MoPNG, consider exploration as “mining,” but the MoEFCC objects to this classification.
Besides, several onshore and offshore blocks under the Discovered Small Fields (DSF) and Open Acreage Licensing Policy (OLAP) rounds are stuck due to objections from the MoEFCC. Moreover, companies engaged in exploration argue that their activities should be recognized as temporary “vegetation change,” a viewpoint not shared by MoEFCC.
The panel is headed by Cabinet Secretary P K Sinha with the secretaries of home, petroleum, and environment forming the team. Other members include a representative from the NITI Aayog and chief secretaries from petroleum-producing states like Assam, Gujarat, Rajasthan, Maharashtra, Telangana, and Tamil Nadu.
| Panel Chairman | Secretaries | Other Representatives |
|---|---|---|
| P K Sinha | Home, Petroleum, and Environment | NITI Aayog and Chief Secretaries of petroleum-producing states |
Discovered Small Field Policy: A Step Towards Domestic Production
The Union government rolled out the Discovered Small Field policy in 2015. The main aim of this policy was to kickstart the production in Discovered Small Fields as early as possible and thereby increase domestic production levels. It includes several noteworthy benefits such as a single uniform license to produce all types of hydrocarbon, no cess on oil production, a moderate royalty structure, customs duty exemptions, and complete freedom for pricing and marketing the produced crude oil and natural gas.
Open Acreage Licensing Policy: Empowering Potential Investors
The Union government declared the Open Acreage Licensing Policy (OLAP) in June 2017. It empowers potential investors by allowing them to choose specific areas they are interested in for exploration. These choices are then communicated to the government, which puts up only those blocks for the bidding process. This policy is an innovative approach that prioritizes investor interest and ensures a more streamlined auction procedure.
