Hydrocarbon Exploration and Licensing Policy (HELP)/ Open Acreage Licensing Policy (OALP)

The Union government in 2016 has approved the Hydrocarbon Exploration and Licensing Policy (HELP).

Facets of the Policy

The four main facets of this policy are:-

  1. Uniform License for Exploration and production of all forms of hydrocarbon - It will enable the contractor to explore conventional as well as unconventional oil and gas resources including CBM, shale gas/oil, tight gas and gas hydrates under a single license.
  2. Open Acreage Policy - It will enable E&P companies choose the blocks from the designated area.
  3. Revenue Sharing Model - Earlier system of production sharing based on Investment Multiple and cost recovery/production linked payment was replaced by easy to administer revenue sharing model. Under this, the Government is not concerned with the cost incurred and receive a share of the gross revenue from the sale of oil, gas etc. This is in tune with Government’s policy of “Ease of Doing Business”.
  4. Marketing and Pricing Freedom for the crude oil and natural gas produced.

Significance

  • Enhanced the domestic oil & gas production,
  • Brought substantial investment in the sector
  • Generated sizable employment.
  • Enhanced transparency and reduced administrative discretion.
  • The introduction of the concept of revenue sharing and freedom of marketing and pricing under HELP is in line with the government’s policy of – ‘Minimum Government, Maximum Governance and Ease of Doing Business’.

Challenges

  • Despite such liberal tendency the government could not gain the interest of FDIs. Only few players like Reliance Industries have shown its interests.
  • This policy provides discretionary powers to Directorate General of Hydrocarbons (DGH) to accept the Expression of Interest (EOI) submitted by the industries.

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