Latest news with #OpenAcreageLicensingPolicy
Time of India
5 days ago
- Business
- Time of India
Oil explorers may get legal shield if assets stripped off
New Delhi: An explorer will be entitled to compensation if the government takes away its assets or contractual rights under an oilfield agreement, according to a draft contract proposed by the oil ministry. The move aims to address international energy companies' long standing demand for protection against expropriation. "If any measure or series of measures taken by the government or the state government substantially or permanently deprives the contractor of the ownership of any assets being utilised for mineral oil operations, or of its rights under the lease or this contract, the contractor shall be entitled to compensation," the draft contract states. The compensation will be equivalent to "all costs and expenditures incurred in respect of mineral oil operations, up to that point relating to such asset or rights deprived," per the draft. However, compensation will not be paid if the company hasn't submitted a field development plan for the specific field, or if the government action was prompted by the need to protect its own rights or legitimate public interests. Energy giant ExxonMobil has for years demanded that exploration contracts provide a legal shield against government moves to expropriate assets. Without using the term 'expropriation', the draft contract attempts to address concerns like those raised by Exxon by including a provision for compensation, an official said. An Exxon India executive previously told ET that its demand for protection against expropriation was "rooted in experience," citing how it faced expropriation after a change in government in Venezuela in the past. The government is reworking the Model Revenue Sharing Contract (MSRC) to attract large foreign oil companies , which have largely stayed away from India's exploration licensing rounds under the Open Acreage Licensing Policy introduced eight years ago. Scarce exploration success and maturing fields have led to falling output and rising dependence on oil and gas imports. Globally, capital allocation for exploration has been shrinking and is being increasingly directed toward regions offering the best returns and stronger investment protection. Lower oil prices are also making it harder for multinationals to commit capital to countries like India, which are not known for abundant petroleum resources.
Time of India
5 days ago
- Business
- Time of India
Oil explorers may get legal shield if assets stripped off
New Delhi: An explorer will be entitled to compensation if the government takes away its assets or contractual rights under an oilfield agreement, according to a draft contract proposed by the oil ministry. The move aims to address international energy companies' long standing demand for protection against expropriation. "If any measure or series of measures taken by the government or the state government substantially or permanently deprives the contractor of the ownership of any assets being utilised for mineral oil operations, or of its rights under the lease or this contract, the contractor shall be entitled to compensation," the draft contract states. Explore courses from Top Institutes in Please select course: Select a Course Category Others Design Thinking Artificial Intelligence MBA Degree Management Finance Data Science CXO MCA Data Analytics Operations Management Leadership Digital Marketing Public Policy healthcare Product Management Cybersecurity Data Science Healthcare others Project Management Technology PGDM Skills you'll gain: Duration: 16 Weeks Indian School of Business CERT-ISB Transforming HR with Analytics & AI India Starts on undefined Get Details Skills you'll gain: Duration: 7 Months S P Jain Institute of Management and Research CERT-SPJIMR Exec Cert Prog in AI for Biz India Starts on undefined Get Details Skills you'll gain: Duration: 9 months IIM Lucknow SEPO - IIML CHRO India Starts on undefined Get Details Skills you'll gain: Duration: 28 Weeks MICA CERT-MICA SBMPR Async India Starts on undefined Get Details The compensation will be equivalent to "all costs and expenditures incurred in respect of mineral oil operations, up to that point relating to such asset or rights deprived," per the draft. However, compensation will not be paid if the company hasn't submitted a field development plan for the specific field, or if the government action was prompted by the need to protect its own rights or legitimate public interests. Energy giant ExxonMobil has for years demanded that exploration contracts provide a legal shield against government moves to expropriate assets. Without using the term 'expropriation', the draft contract attempts to address concerns like those raised by Exxon by including a provision for compensation, an official said. An Exxon India executive previously told ET that its demand for protection against expropriation was "rooted in experience," citing how it faced expropriation after a change in government in Venezuela in the past. The government is reworking the Model Revenue Sharing Contract (MSRC) to attract large foreign oil companies , which have largely stayed away from India's exploration licensing rounds under the Open Acreage Licensing Policy introduced eight years ago. Scarce exploration success and maturing fields have led to falling output and rising dependence on oil and gas imports. Globally, capital allocation for exploration has been shrinking and is being increasingly directed toward regions offering the best returns and stronger investment protection. Lower oil prices are also making it harder for multinationals to commit capital to countries like India, which are not known for abundant petroleum resources.
Mint
17-07-2025
- Business
- Mint
ONGC, bp tie up to drill stratigraphic wells in offshore sedimentary basins
New Delhi: State-run Oil and Natural Gas Corp. Ltd (ONGC) on Thursday signed a memorandum of understanding (MoU) with global energy major bp to collaborate on drilling stratigraphic wells in four offshore sedimentary basins in India—Andamans, Mahanadi, Saurashtra and Bengal. The MoU was signed during the second edition of Urja Varta 2025, a conclave on upstream oil and gas sectors organized by the Directorate General of Hydrocarbons. A stratigraphic well is drilled specifically to obtain geological information rather than for oil or gas production. "ONGC has signed a strategic Memorandum of Understanding (MoU) with bp_plc on 17 July 2025, to collaborate on drilling stratigraphic wells in India's Category II & III offshore sedimentary basins: Andaman, Mahanadi, Saurashtra, and Bengal. This partnership will enhance geological understanding and unlock untapped hydrocarbon potential, strengthening India's long-term energy security," ONGC said in a tweet. Commenting on the development Kartikeya Dube, head of country, bp India and senior vice president, bp group said: "We are excited to underpin our existing alliance with ONGC in this project of national and strategic significance. We believe drilling of new stratigraphic wells will be very valuable and can lead to a new understanding and potential." He added that bp's experience in deep water exploration supported by new seismic technologies would be of great assistance during the evaluation and subsequent drilling of stratigraphic wells. In the ninth round of auctions under Centre's Open Acreage Licensing Policy (OALP), ONGC tied up with Reliance Industries Ltd and bp plc for a block in the Saurashtra Basin. This marked the entry of London-headquartered bp into India's upstream exploration & production (E&P) space. In the ninth round ONGC secured 15 blocks—four in partnership with other players, and 11 independently. In February this year ONGC had signed an MoU with bp for collaboration in exploration and production of oil and gas, energy trading and other segments in the energy business both in India and internationally. The state-run energy major's shares on the BSE closed at ₹ 243.90 on Thursday, higher by 0.41% from its previous close.
Time of India
17-07-2025
- Business
- Time of India
No pressure on India on Russian crude, will buy crude from wherever required to meet demand: Oil Minister Puri
New Delhi: India's oil minister Hardeep Singh Puri today asserted the country will continue sourcing oil from "wherever necessary" to safeguard its interests and ensure energy security. This comes days after U.S. President Donald Trump's statement that countries purchasing Russian exports could face sanctions if Moscow fails to reach a peace agreement with Ukraine within 50 days Speaking at Urja Varta 2025, a flagship upstream oil and gas conclave of the Directorate General of Hydrocarbons (DGH), Puri said the country feels 'no pressure' and has enough supply options to ensure uninterrupted fuel availability even in turbulent times. 'We will buy from wherever we have to because the Prime Minister's commitment is to the Indian consumer,' Puri said at a public discussion on India's energy roadmap. Responding to the US threat, he added, 'I don't feel any pressure in my mind, and I don't think my boss's mind is wired to feel any pressure.' Russia now supplies around 35 per cent of India's crude oil, up from just 0.2% before the Ukraine conflict in early 2022. The minister said India has significantly diversified its sources—buying from 40 countries now compared to 27 earlier—and is ready for any global supply disruption, including a hypothetical closure of the Strait of Hormuz. 'We have 21 to 25 days of oil stock. Even if the Strait is closed for a few days, we can manage. I'm not unduly worried,' he said, adding that more oil is entering the global market from new players such as Brazil, Guyana and Canada. Puri also dismissed concerns over a potential price cap breach on Russian crude. 'Russian oil was never sanctioned, only capped. If we get oil below the cap, we will buy it. Why not? It benefits the consumer,' he said. India currently imports energy worth $15 billion from the US and may increase it to $25 billion. The minister confirmed LPG imports from the US account for about 10% and pointed to new contracts under discussion with Norway's Equinor and others. Amid sanctions on Iran and Venezuela, Puri said oil from those countries continues to reach the market, though India has refrained from buying since 2019 due to international restrictions. 'If it's a sanction we have agreed to, we won't violate it." Despite growing global pushback against fossil fuels, India is doubling down on domestic oil and gas exploration. The government has opened up 2.57 lakh square kilometres—its biggest ever offering—for bidding under the 10th round of the Open Acreage Licensing Policy (OALP). A total of 22 states are participating in the exploration drive. 'We had 3.5 million sq km of sedimentary area. We've already opened up 1 million sq km, including previously declared no-go zones,' Puri said, attributing the shift to clearance from defence and scientific agencies. 'Earlier, DRDO and Navy would say, 'no-go'. Now the PM has said, open it up.' The government is also pushing for more private and global participation in oil exploration by compensating technical partners for surveys and offering first right of refusal on finds. 'Petrobras is working with Oil India. We will pay them for services, and if oil is struck, they get priority,' he said. The changes have been formalised under the revamped Overhaul of Oilfields Regulation and Development Act, replacing the 1948-era law. The new law introduces a single permit system, stability in lease conditions, and removes archaic clauses that hindered investment. Puri said, 'It's not about changing laws in Shastri Bhavan. We did wide stakeholder consultations, took global best practices, and made the changes.' On enforcement, Puri said the government is taking action against firms that won blocks but failed to develop them. 'Many companies sat on unrealistic bids for 10–12 years. We're now cancelling those,' he said. Asked if global majors will invest under the new regime, Puri said the investor mood has changed. 'Earlier, no one wanted to explore. Now they see India as a long-term opportunity. The economic centre of gravity is shifting. India is growing at 6.5%—much faster than the economies we've overtaken.' Though over 85 per cent of India's crude demand is still met through imports, Puri said the ratio may gradually fall with rising domestic production, higher ethanol blending, and the adoption of green hydrogen and EVs. 'We were at 1.4 per cent ethanol blending, now we're at 20 per cent. Green hydrogen tenders are going below $4/kg. These changes will alter the energy basket,' he said. Asked about the use of AI in oil sector operations, Puri said its adoption is growing in refineries and exploration, though data is still being compiled for a clearer impact assessment. In the final stretch of the conversation, the minister addressed criticism of India's continued investment in oil exploration. 'In 1976, Shell predicted oil would peak by 2000. Today, no one will even say 2030 or 2040. Even as we transition, we need fossil fuels to bridge the gap. That's the reality.'
Mint
12-07-2025
- Business
- Mint
Norms for transfer of participating interest among partners in oil, gas eased
New Delhi: In a move aimed at improving operational flexibility and ease of doing business in India's upstream oil and gas sector, the Union government has approved a long-pending recommendation to allow transfer of participating interest (PI) among existing partners without requiring government consent—as long as there is no change in operatorship. Participating interest means, in respect of each party constituting the contractor, the undivided share expressed as a percentage of such party's participation in the rights and obligations under the contract. Under the current contractual provisions of production sharing contracts (PSC), revenue sharing contracts (RSCs), discovered small fields (DSF) and coal bed methane (CBM), any participating interest or stake transfer within the existing parties requires prior written consent from the government. This move is part of the government's efforts to boost investors' interest and reduce energy import dependency. India aims to explore 2.5 lakh square km in the 10th round of auctions under the Open Acreage Licensing Policy. 'The Management Committee may be empowered to approve Participating Interest transfer cases where the contractor intends to transfer the PI within the existing parties of the contract, subject to no change in operatorship," said the report of the joint working group in April. A letter dated 10 July to the Director General of Hydrocarbons noted that the recommendation has been 'approved." The changes should come into effect at the earliest, as the Directorate General of Hydrocarbons has been asked to take necessary actions based on the ministry's approval. However, no specific timelines were mentioned. Noting that under the existing contractual provisions of all contracts, participating interest transfer within the existing parties of the contractor requires prior written consent from the government, the joint working group in June had recommended: 'However, this process involves a comprehensive technical, financial, and legal due diligence for each case." Expediting approval It added that in such cases, as the participating interest holders have already undergone verification during the contract award stage, evaluation for any change in the participating interest among existing parties of the contract may be foregone. 'Further, in many cases it has been observed that internal transfer approval can take up to six months, leading to significant project delays," the working group had said in its report on issues related to ease of doing business in the Indian upstream sector. The recommendation aims to expedite the approval process and reduce project delays, thereby promoting transparency and ease of doing business. 'PI holders should be required to comply with all the existing conditions of the contract," the recommendations said. Although the transfer of participating interest does not require the government's nod, it would need the signature of a government representative. This move is part of the government's efforts to boost investor interest. Under the 10th round of auction under the Open Acreage Licensing Policy, the government aims to explore 250,000 sq. km and reduce oil import dependence. The Draft Petroleum and Natural Gas Rules, 2025, for which stakeholders need to give their feedback by 17 July, also aim to modernise India's upstream oil and gas framework with several major reforms. Key among them is the introduction of an investor-friendly stabilisation clause, designed to protect lessees from adverse impacts of future legal or fiscal changes, such as increases in taxes, royalties or other levies, by allowing compensation or deductions. The Oilfields (Regulation and Development) Act, 1948, was amended in March 2025, which is also expected to boost investor interest in the oil and gas exploration and production sector. Data sharing in India During his visit to Vienna this week for the 9th Opec International Seminar, the minister for petroleum and natural gas, Hardeep Singh Puri, met several stakeholders in the oil and gas space, including Wael Sawan, chief executive officer (CEO) of Shell; Murray Auchincloss, CEO of bp; and Russel Hardy, Group CEO of Vitol, and spoke of opportunities to invest in the country's oil and gas sector. Among other recommendations, minister Puri approved open sharing of data from the National Data Repository at zero charge to micro, small and medium enterprises (MSMEs), startups and academic institutions. "NDR data may be integrated with the repositories of the National Oil Companies (NOCs), such as ONGC and OIL, and other ministries such as ministry of mines, ministry of coal, ministry of earth sciences, Central Ground Water Board, etc. ensuring seamless access to comprehensive datasets, including seismic, well, and other geological information," the recommendations said. The move aims to promote knowledge sharing, collaborative ventures, and technological advancements through enhanced data accessibility, thereby encouraging innovations in the oil and gas industry.
