India’s Cabinet Committee on Economic Affairs (CCEA) has approved a policy for the extension of production-sharing contracts for blocks awarded prior to the New Exploration Licensing Policy (NELP), which has been in use since 1999 (OGJ Online, Mar. 8, 2017).
The extensions will facilitate investment to extract reserves by using new technologies, according to India’s Press Information Bureau (PIB). The government expects contractors will make an additional investment of more than $5.43 billion because of extensions.
The most recent annual production from the pre-NELP blocks was about 55 million bbl of oil and 965 million cu m of natural gas. Reserves are estimated at 426 million boe.
PIB said the policy has detailed guidelines regarding criteria for grants of extension and duration.
The government’s share of “profit petroleum” during the extended periods would be 10% higher, “thus bringing additional revenues to government.” The policy will act as “a progressive step” towards achieving the target of 10% reduction in imports of crude oil by 2022.
CCEA is chaired by Prime Minister Shri Narendra Modi.
