The government has introduced the Hydrocarbon Exploration and Licensing Policy, which will require companies to acquire a unified licence to manage all hydrocarbon reserves such as oil, gas, shale and coal bed methane. According to the policy, oil companies will be able to freely price gas, carve out blocks of their choice for exploration, share revenue (and not profit) with the government, and would not need to be audited by the Comptroller and Auditor General (CAG). The combination of a unified licensing policy (which provides access to all hydrocarbon resources), open acreage (which helps operators choose specific blocks where they have a competitive advantage) and freedom in pricing will create significant global interest in the relatively unexplored Indian basins. The new policy lifts all restrictions on choosing a buyer and the price at which producers can sell gas, a substantial shift from the extant guidelines. The exploration blocks awarded under the new policy will take about 8 to 10 years to commence production.

GET ACCESS TO OUR ARTICLES

Enter your email address