Question : Production Sharing Contracts

(a) whether the Government has streamlined the existing Production Sharing Contracts (PSCs) with four key changes in the policy framework to increase domestic hydrocarbon production and if so, the details thereof along with any plan to increase exploration period by two years and appraisal period for one year for North Eastern fields;
(b) whether the Government has started bidding process for 55 oil and gas blocks under Discovered Small Field (DSF) Policy/ revamped policy regime and if so, the details thereof along with the number of blocks auctioned so far and the total revenue generated/ earned therefrom, oil block-wise;
(c) whether the Government has deferred the bidding for 60 oil and gas fields in the DSF-II bidding round which were likely to be launched in June, 2018 and if so, the details thereof and the reasons therefor;
(d) whether the Government has announced New Exploration and Licensing Policy (NELP) that would help to increase the revenue of the States if so, the details and salient features thereof;
(e) the details of PSCs signed by the Government for 26 discovered blocks, 28 exploration blocks under pre-NELP and 254 blocks under NELP, block-wise; and
(f) whether the ONGC proposes to hire services of international oil firms and has invited offer in this regard to raise output from mature oil fields and if so, the details thereof ?

MINISTER OF PETROLEUM& NATURAL GAS
(SHRI DHARMENDRA PRADHAN)
(a) Government has approved the policy framework for streamlining the working of Production Sharing Contracts (PSCs) for increased domestic production of hydrocarbon resources. The policy framework includes (i) Sharing of Royalty and Cess in proportion
to Participating Interest of the Contractors in Pre-NELP Exploration Blocks and to be cost recoverable; (ii) Additional 2 years for Exploration activities and additional 1 year for appraisal activities has been granted for operational blocks in North Eastern Region (NER) besides marketing including pricing freedom for natural gas produced in NER; (iii) Allowing extension of notice period from 7 days to 15 days in events of force majeure in operational blocks of Pre-NELP and NELP contracts, and (iv) Extending Tax benefits under section 42 of Income Tax Act, 1961 to Pre-NELP discovered fields during extended period under the Policy for Pre-NELP PSC Extension dated 28.03.2016.
(b) & (c) : To increase domestic production of oil and gas, the Discovered Small Field (DSF) Policy was notified in September, 2015 for monetization of 69 discovered small fields of ONGC and OIL, which had not been put into production. Under DSF Bid Round-1, 30 contract areas (43 fields ) were awarded for development through International Competitive Bidding (ICB). The Government has also identified 60 fields for award through ICB under DSF Bid Round-II. Government has also decided to extend the Discovered Small Field Policy for future round of bidding. The blocks auctioned under DSF policy have not commenced commercial production, thus no revenue has been earned so far.
(d) & (e): New Exploration and Licensing Policy (NELP) was introduced in 1997 to provide a level playing fields to foreign, private and public sector companies and to attract investments and technologies in Exploration & Production (E & P) sector. The salient features of NELP are viz; (i) No mandatory state participation or any carried interest by National Oil Companies (NOCs); (ii) Sharing of profit petroleum with Government of India based on biddable pre-tax investment multiple (PTIM) achieved by the contractor; (iii) Royalty at the rate of 12.5% for the onland areas and 10% for offshore areas; (iv) Exemption from Cess. Under NELP, blocks were awarded through a transparent International Competitive Bidding process. The block- wise details are annexed.
(f) ONGC has approved business model to invite service providers for Production Enhancement Contract (PEC) to raise output from its mature oil fields. Notice Inviting Tender have been floated by ONGC in respect of 2 onshore fields for PEC.
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