Ministry of Petroleum and Natural Gas launches Open Acreage Licensing Programme

• 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.