GREATER NOIDA (UP), Nov 15: A bill to amend the existing law governing exploration and production of oil and gas will provide policy stability to investors as also promote ease of doing business, Oil Minister Hardeep Singh Puri said on Friday.
Speaking at the Geo India 2024 conference in Greater Noida, on the outskirts of the national capital, the minister said the government’s reforms agenda to make it easier to find and produce crude oil (which is refined into fuels like petrol and diesel) and natural gas (which is used to generate power, make fertilizer or turned into cooking gas and CNG) will continue.
He promised interference-free administration.
“If you have a private sector company which is family owned, you still have interference. But if you have well run state oil companies as our oil firms are, and you have a minister like me, you will have zero interference. I have said that repeatedly,” he said.
The Oilfields (Regulation and Development) Amendment Bill, 2024 was introduced in the Rajya Sabha in August and is likely to be approved in the ensuing winter session of Parliament later this month.
The bill “aims to ensure policy stability for oil and gas producers and allow international arbitration and extend lease period” over areas for producing fossil fuels, he said.
It aims to decriminalise some of the provisions of the original 1948 law by introducing “penalties, adjudication by an adjudicating authority and appeal as against the order of adjudicating authority”.
The bill proposes to introduce ‘petroleum lease’ and expands the definition of mineral oils to include crude oil, natural gas, petroleum, condensate, coal bed methane, oil shale, shale gas, shale oil, tight gas, tight oil and gas hydrate. This is with a view to raising domestic output and cutting reliance on imports.
India currently imports more than 85 per cent of its crude oil needs and about half of its natural gas requirement.
“We have a formidable 651.8 million tonnes of recoverable crude oil reserves and 1138.6 billion cubic metres of recoverable natural gas reserves nestled within our sedimentary basin. India should be a powerhouse of exploration and production,” Puri said.
He said in the past, eye was taken off the ball on exploration and production.
This is being reversed now with allowing for exploration to find oil and gas within the previously defined no-go areas such as the one near missile testing sites, he said.
The recently concluded bid round saw a record 1.36 lakh square kilometers of area being offered, of which 38 per cent was previously marked no-go area, he said.
“Today we are trying to catch up and make up for somewhat tardy or slow focus on implementation in the past,” he said.
Listing out reforms carried out in recent months, he said ease of doing business in the Indian exploration and production (E&P) sector has improved. “We have simplified 37 processes requiring approval and we have compressed them from 37 to 18, of which 9 were put for self certification.”
Also, the regime has shifted from production sharing contracts, where blocks or areas were awarded to entities offering to do most E&P work and their cost being reimbursed from the oil and gas output, to revenue sharing model where blocks are awarded on the basis of revenue share offered to the government, he said.
A joint working group, composed of representatives of private E&P operators, national oil companies, the ministry of petroleum and natural gas, and the Directorate General of Hydrocarbons (DGH), has been formed to address industry concerns and improve ease of doing business in the sector, he said.
“We are setting up a dispute resolution mechanism to resolve various contractual matters. 25 disputes which were pending for more than 10 years have now been settled amicably,” he said.
Puri said the entire sedimentary basin will be mapped by 2026-27, offering investors data to enable them to make investment decisions.
“We are ensuring data availability of Indian sedimentary basins to investors (through) national seismic programme in the onshore areas, the EEZ survey in the offshore areas, and opening up of the Andaman basin, upgradation of the National Data Repository (NDR) etc,” he said. “We are opening a data centre within the campus of University of Houston in the US for ease of doing and viewing by foreign companies.”
With global oil prices rising and geopolitical turbulence, “I think we have no option but to re-energise and work the E&P sector,” he said, adding that the law governing the sector, which is of 1940s legacy, is being revised and tweaked.
“Clearly there is a past history which we have to correct. Today we are confident that there is much greater oil to be discovered or as I keep saying ‘a Gynana to be discovered’ here,” he said. “I have one requirement, let us make up for lost time in the E&P sector because everything else is doing well — our consumption is rising, our demand is growing at three times the global average. Today something like 5.4 million barrels of crude are consumed every day. It will go up to 7 million bpd in 2030.” (PTI)
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