Exploration Licensing 10 to be under new policy framework

A new LPG trunk line from Paradip to Hyderabad will be taken up in Phase-1 at an estimated cost of Rs 2,500-crore this year, according to Union Petroleum Minister

Union minister of state (independent charge) for Petroleum and natural gas, Dharmendra Pradhan, on Friday said his Ministry was talking to stakeholders and international consultants to come up with a new framework to bid for oil and natural gas reserves under the the 10th round of the New Exploration Licensing Policy (NELP) to be announced this year.

"After looking at the experience of the existing production-sharing model, we have identified three major thrust areas for the NELP 10 to be announced this year," the minister told reporters here.

Among these proposals, the petroleum ministry is examining the Open Acreage Policy under which any company can bid for any amount of acreage in contrast to the previous practice of putting the fixed blocks for auction. The last NELP round was conducted in the year 2011.

The ministry is also examining a proposal to expand the exploration licensing policy beyond the conventional oil and natural gas products. Under this proposal, the developer will be given entitlement on products beyond the conventional oil and natural gas; "If somebody finds an unconventional hydrocarbon, it will also be given (for exploration and exploitation) to the person concerned," the minister said.

The product-sharing mechanism is also being considered as a part of the ongoing exercise for determining the policy framework for NELP 10, according to him.

Responding to a question on the Centre's pricing policy on the upstream oil and natural gas, Pradhan said investors had been happy with the existing pricing regime and policy clarity. "Those who have sold the wealth of the country by determining $ 9 per mmbtu of gas, are pointing a finger at us," he said, while reacting to the Congress party's criticism against Prime Minister Narendra Modi on various issues in the recent times.

The minister said his government had changed the priorities of allocation of natural gas while giving top most priority to domestic and transport sectors.

"The government is prepared to provide any amount of natural gas to these sectors. As far as the stranded gas power plants are concerned, our ministry had recently introduced a scheme by providing RLNG as well as viability gap funding,"he said.

On the new investments, the minister said a new LPG trunk line from Paradip to Hyderabad will be taken up in Phase-1 at an estimated cost of Rs 2,500 crore this year, while a feasibility study was under way to build a similar pipeline from Mumbai to Hyderabad in the second phase.

"We are committed to give any amount of CNG and piped gas to the city of Hyderabad as it was denied its due share in spite of the fact that the East-West natural gas trunk line passes through the city" he said, while stating that an amount of Rs 300 crore was being spent on capacity expansion of LPG refilling facilities and another Rs 500 crore would be spent on a new distribution terminal being put up on the city outskirts by the Indian Oil Corporation (IOC).

Also, about Rs 100 crore would be spent on expanding the CNG and piped gas network in Hyderabad this year, according to the minister.