NEW DELHI: The government on Monday cleared 30 projects of oil and gas firms like Cairn India and ONGC ending months of logjam over discoveries mired in contractual disputes. The move will help monetise about 2.6 trillion cubic feet of gas reserves.
Speaking at the ongoing Geo India Conference, Oil Minister Dharmendra Pradhan said “I am happy to share that after this approval, within a short span of less than 3 months, 30 long-pending issues have been resolved. This is expected to result in exploitation of about 34 million barrels of oil and about 0.7 trillion cubic feet (TCF) of gas.”
Discoveries, mainly of Cairn, ONGC and GSPC, were stuck because of lack of flexibility in timelines. These included 10 finds of Cairn in Rajasthan which have not been endorsed by DGH.
He said the government has approved a policy framework for relaxation, extensions and clarifications in timelines that will grant operational flexibility to help produce oil and gas from several discoveries that are mired in contractual disputes.
Operational flexibility has been provided in enforcing contracts by way of relaxing some time lines for discoveries so that E&P activities does not suffer due to rigid decision making process.
The Production Sharing Contract (PSC) between the government and the explorer has rigid timelines for each stage of exploration and actions have been initiated against firms even if deadlines are missed by a day.
“The estimated reserves of discoveries where additional probing has been allowed is to the tune of about 172 million barrels of oil and 1.9 TCF of gas reserves,” he said.
The minister also added that the Policy Framework for Relaxations, Extensions and Clarifications at development and production stage under PSC will help early monetisation of hydrocarbon discoveries.
Also, the deadline for submission of investment plan for discoveries will also be extended by up to six months, the minister informed.
The PSC provides for time period for submission of field development plan for hydrocarbon discovery after DOC. There is no provision in the PSC for extension of this time period and non-acceptance of FDP due to late submission results in non-monetisation of discoveries.