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Exploration Activities & Framework

The energy demand will rise with social and economic development in the country. The country is dependent on imports for about 83% of its crude oil requirement and to the extent of about 47% in case of natural gas. In order to bridge the gap between energy supply and demand, MoPNG is committed to accelerate the exploration and production activities in the country.

The reforms in Exploration and Production (E&P) sector were initiated through participation of private and foreign companies in oil and gas sector in 1991 when 28 discovered fields (Pre-NELP Discovered Field) were auctioned during 1991-93. Further, 28 Exploration Blocks were awarded between 1990 -1997 known as Pre-NELP Exploration Blocks. Subsequently, after implementation of New Exploration Licensing Policy (NELP) and Coal Bed Methane (CBM) Policy in 1997- 99, the level playing field was provided to the private investors by giving the same fiscal and contract terms as applicable to National Oil Companies (NOCs) for the offered exploration acreage.

In a major policy drive to give a boost to petroleum and hydrocarbon sector, the Government has unveiled a series of initiatives. The reforms in hydrocarbon sector are based on the guiding principles of enhancing domestic oil and gas production, increasing investment, generating sizable employment, enhancing transparency and reducing administrative discretion. Government has formulated path breaking policies to revolutionize the E&P sector which inter-alia includes -

  • Gas Pricing Reforms
  • Policy Framework for Early Monetization of CBM
  • Discovered Small Field (DSF) Policy
  • Reform Initiatives to enhance Domestic Production
  • Hydrocarbon Exploration and Licensing Policy (HELP) coupled with operationalization of Open Acreage Licensing Policy (OALP)
  • Monetization of the Ratna offshore field
  • Permission of Extraction of CBM to Coal India Limited (CIL) & its subsidiaries in Coal Mining area.
  • Policy for the Grant of extensions to Pre-NELP Discovered fields and Exploration Blocks Hydrocarbon Vision 2030 for North East
  • National Seismic Programme of Un-appraised areas
  • National Data Repository (NDR)
  • Policy framework to permit exploration and exploitation of unconventional hydrocarbons in existing acreage of Production Sharing Contracts (PSCs), CBM contracts and Nomination fields
  • Policy framework for streamlining the working of PSCs
  • Policy framework to incentivise enhanced recovery methods for oil and gas

In the upstream sector, the two Upstream National Oil Companies (NOCs) viz., Oil and Natural Gas Corporation Limited (ONGC) and Oil India Limited (OIL) play a dominant role with a total share of about 71.5% in oil and 81% in gas production in the country in the year 2017-18. ONGC produces nearly 61% of indigenous crude oil and 71.5% of country's gas production, while OIL's share is 10% of indigenous crude oil and 9% of gas production. The share of Private/JV companies in oil and gas production is 29% and 19.5% respectively.

The Directorate General of Hydrocarbons (DGH) was established under the administrative control of Ministry of Petroleum and Natural Gas by Government of India Resolution in 1993. The objective of setting up of DGH was to promote sound management of the Indian oil and natural gas resources having a balanced regard for environment, safety, technological and economic aspects of petroleum activity. In addition, DGH has been strengthened with certain responsibilities concerning the Production Sharing Contracts for Discovered fields/Exploration blocks, promotion of investment through implementation of policies including Discovered Small Field Policy, Hydrocarbon Exploration & Production Policy (HELP) and monitoring of E&P activities.

The chronology of E&P regimes in India

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As per India Hydrocarbon Vision 2025, 100% Indian sedimentary area is to be appraised. Onland area covers 1.63 Million Square Kilometres (48.5%) and Offshore area covers 1.73 Million Square Kilometres. As of now, only 48% of the basinal areas have been appraised. About 4% sedimentary basinal area has been declared as "NO GO area" by Ministry of Defence / Ministry of Environment & Forest which remains unapprised. This means, about half of the Indian sedimentary basins have the undiscovered potential of hydrocarbons.

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