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Open Acreage Licensing Policy (OALP)

Posted on December 22, 2021 by admin1  1790

In News 

  • Recently, the Government launched the Open Acreage Licensing Programme(OALP)Bid Round-VII for International Competitive Bidding in continuation of its aggressive programme for exploration and adhering to the prescribed timelines.
    • Successful award of Round-VII Blocks would add a further 15,766 sq. km of exploration acreage and cumulative acreage under OALP and it will be increased to  207,692 sq. km.

About Open Acreage Licensing Policy (OALP)

  • It is the most crucial part of the Hydrocarbon Exploration and Licensing Policy (HELP).
  • It provides a single, uniform Licence for exploration and production of conventional as well as unconventional hydrocarbon resources.
  • Features:
    • The Freedom to carve out acreages of choice under OALP bid rounds has been given to contractors.
    • The revenue-sharing model is used for offering fields.
    • Producers have complete marketing and pricing freedom for crude oil and natural gas produced.
  • Benefits of OALP:
  • It has reduced multiple licences and procedures for extracting different hydrocarbons even from the same well.
  • Brought in a quantum jump in the Exploration & Production sector:
    • The successful roll-out of the HELP regime, followed by OALP Bid Rounds, has led to an increase in exploration acreages in India.
  • Concerns Related to OALP:
    • Lesser involvement of Private Players:
      • Public Sector Companies like Oil and Natural Gas Corp (ONGC) and Oil India (OIL) are the major winners of the bidding rounds.
    • Lack of clarity in Government Policy and Regulations 
    • Higher Tax and Cess:
      • Proposal by the Petroleum Ministry to reduce the oil cess charge on domestic production of crude has been rejected by the Finance Ministry.
    • Less Participation of Foreign Companies:
      • Indian attempts to attract Foreign Energy Giants are not yielding expected results.

Way Ahead

  • Rationalise Taxation and Cess.
  • Consult different stakeholders for their concerns.
  • Timely and detailed guidelines.
  • Incentivise the Private and Foreign Players to bring in better technology.

Hydrocarbon Exploration and Licensing Policy (HELP) 

  • HELP was brought in March 2016 replacing the erstwhile New Exploration Licensing Policy (NELP) 
  • It had 2 key drivers
    • The Open Acreage Licensing Programme (OALP) 
    • The National Data Repository (NDR) 
    • Both were launched in June 2017
  • Aim:   To accelerate the Exploration and Production (E&P) activities in India.
  • The main features of HELP are 
    • Revenue Sharing Contract.
    • Single, uniform Licence for exploration and production of all Hydrocarbon resources.
    • Choice with Bidder to carve acreage.
    • Marketing & pricing freedom.
  • Reforms : The Government notified the further policy reforms in Exploration and Licensing Policy in February, 2019. 
    • The focus was shifted from ‘revenue’ to ‘production’ maximization’. There is continued focus on greater transparency and streamlined procedures.

HELP

NELP

Revenue Sharing Contract

Production Sharing Contracts: Based on Profit Sharing.

Profit or loss is not a concern of the Government. Hence less Red tape is there.

Red tapism as the Government wanted to calculate the input cost of explorers and extractors.

Single Uniform License

Different Licences

Source: PIB

 
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