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OilMin to upstream regulator: Solve block disputes by Nov 30

Resolution to boost production by 250 mn barrels of crude a year.

Written by Amitav Ranjan | New Delhi |
November 26, 2014 1:08:11 am

In order to shore up the country’s energy security in the short term, the petroleum ministry has asked upstream regulator DGH to resolve ongoing contractual disputes in 38 oil and gas exploration blocks by November 30.

The resolution would bring to production within a year nearly 250 million barrels of crude oil and 35 billion cubic metres of natural gas discovered in four blocks that are held up because of delay in the submission of a declaration of commerciality (DoC) or a field development plan (FDP), said sources. Earlier this month, petroleum secretary Saurabh Chandra directed the Directorate General of Hydrocarbons (DGH) to resolve all contractual issues under a new policy approved by the Cabinet that provides operational flexibility in oil and gas exploration and production.

“As directed by secretary (Ministry of Petroleum & Natural Gas), all such issues that can be taken up under the above policy framework are to be resolved by 30th November with intimation to the Ministry,” says the directive to the director general of DGH.

The policy on relaxation and extension in timelines for development and production of oil and gas was approved by the Cabinet on October 18 to resolve operational issues — some ongoing for more than two years — hampering exploration and production operations and help monetise the pending discoveries.

The policy provides the DGH the power to grant extensions and flexibility to accept discoveries and submit FDP for which operators had failed to provide prior notification to the government.

However, the extension for submission of DoC of the discoveries has been limited to six months for onland blocks and one year for offshore blocks. For submission of investment plan or FDP for the discoveries, extension would be given up to three months for onland blocks and six months for offshore blocks.

Earlier, there was no provision in the production sharing contracts to extend time periods. The policy also provides for reduction in the minimum work programme committed in case a block or its part is not available for exploration activities due to denial of permission by agencies.

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