National exploration licensing regime in India.pptx

exploration regime NELP of India

1. NELP

2. Pre Independence era HELP NELP era 254 Blocks Pre NELP era 28 Blocks, 28 Fields Nomination era 334 ML, 17 PEL 1886 - 1946 1947 - 1990 1990 - 1996 1997 – till date Future Exploration & Production Regimes in India PSC Regime CBM 33 Blocks 2 Hydrocarbon Contracts- Learning's from two decades of PSC

3. New Exploration Licensing Policy (NELP) (1999-2016)

4. Objectives : To attract Significant risk capital from Indian and Foreign companies, State of art technologies, New geological concepts and Best management practices to explore oil and gas resources in the country

5. Features of NELP 100% Foreign Direct Investment (FDI) is allowed under NELP. No mandatory state participation through ONGC/OIL or any carried interest of the Government. Blocks to be awarded through open international competitive bidding. ONGC and OIL to compete for obtaining the petroleum exploration licenses (PEL) on a competitive basis instead of the existing system of granting them PELs on nomination basis. Freedom to the contractors for marketing of crude oil and gas in the domestic market.

6. Features of NELP ( Contd …) Royalty at the rate of 12.5% for the onland areas and 10% for offshore areas. Royalty to be charged at half the prevailing rate for deep water areas beyond 400m. Cess to be exempted for production from blocks offered under NELP. Companies to be exempted from payments of import duty on goods imported for petroleum operations. Agreement between government and contractor is governed by a Production Sharing Contract.

7. Journey of NELP PSC License and Exploration Period NELP-I to NELP-V : the total Exploration Period of 7 years (D/W 8 years) consisted of 3 Exploration Phases. NELP-VI & VII , the Exploration Period consisted of 2 Exploration Phases, Phase-I of 4 years & Phase-II of 3 years. For Deepwater / Frontier Areas – Phase-I not exceeding 5 years and Phase-II not exceeding 3 years. NELP-VIII & NELP-IX: Initial Exploration Phase of 4 years, and (optional) Subsequent Exploration Phase of 3 Years. If opted for Subsequent Exploration Phase, Minimum well commitment should be as follows: Deep water block : 1 well in 3 years On land /Shallow water block: 1 well for each year.

8. Journey of NELP PSC Relinquishment NELP-I to NELP-V: Mandatory: Min 25% after each Phase. NELP-VI: Optional (Minimum 25% if opted) NELP-VII : Mandatory, Min 40% after Phase-I NELP-VIII & IX: Can retain total area if decided to go to Subsequent Exploration Phase Work Programme NELP-VI onwards, Block Specific mandatory 2D Seismic API covering the entire Contract Area during 1st Exploration Phase/Initial Exploration Phase.

9. Limitations of NELP Separate policies and licenses for different hydrocarbons. Overlapping of resources between different contracts. Production Sharing Contracts (PSCs) under NELP are based on the principle of “profit sharing”. Requirements for Government approval at various stages.