Cabinet relaxes NELP, pre-NELP pact rules

The Union Cabinet on Wednesday approved the policy framework to streamline production sharing contracts signed in the pre-New Exploration Licensing Policy (NELP) and NELP periods.

Key decisions under the framework include increasing the exploration period granted for blocks in the northeast and easing the sharing of royalties with the developers of the blocks.

New Exploration Licensing Policy (NELP) was conceptualized by the Government of India, during 1997-98 to provide an equal platform to both Public and Private sector companies in exploration and production of hydrocarbons.

It provided for the establishment of the Directorate General of Hydrocarbons (DGH) as a nodal agency for its implementation.

It was introduced to boost the production of oil and natural gas and providing a level playing field for both public and private players.

Before implementation of the New Exploration Licensing Policy (NELP) in 1999, a mere 11% of Indian sedimentary basins were under exploration, which has now increased extensively over the years.

About Hydrocarbon Exploration and Licensing Policy (HELP):

Government of India launched a new policy regime for Exploration & Production (E&P) sector namely Hydrocarbon Exploration and Licensing Policy (HELP) in 2016 which is paradigm shift from earlier policy regime.

The main features of the new Policy regime 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 the 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.

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