New Delhi: India will offer oil and gas blocks to investors in two to three months under the new Hydrocarbon Exploration Licensing Policy (HELP), oil secretary K.D. Tripathi said. The policy entails an open acreage system of letting bidders chose the area of their choice.
Speaking at a conference on energy security organized by industry lobby group Federation of Indian Chambers of Commerce and Industries, Tripathi said the new licencing regime will have revenue sharing instead of the earlier system of profit sharing. Investors will get pricing and marketing freedom for natural gas in the new regime that was cleared by the government in March 2016.
The government wants to expand the area under exploration to cut down hydrocarbon exports. Despite the increase in renewable energy generation in the country, fossil fuels will continue to play a significant role in the medium term in meeting the requirement of cooking and transportation, the secretary said.
“Gas that will come from difficult fields, small and marginal fields and fields to be auctioned under HELP will get pricing and marketing freedom,” said Tripathi.
At present, price of gas produced from fields nominated to state-run companies before 1990 as well as gas from fields auctioned under the subsequent New Exploration Licensing Policy (NELP) are guided by formulae linked to their global prices. Grant of pricing and marketing freedom will enable a new price discovery for the fuel within the country in light of the fact that global markets, where gas is available cheap, are geographically removed from India.
The Modi administration has set an aspirational target to cut oil import dependence by 10 percentage points to 67% by 2022 from 2015 levels but consumption of fossil fuels has been increasing despite the rise of clean sources of electricity generation.