NEW DELHI: India’s upstream oil and gas sector regulator Directorate General of Hydrocarbons (DGH) released a set of guidelines on Friday making it easier for companies to begin commercialising discoveries without having to wait for time-consuming paperwork.
The regulator’s new guidelines make possible the early monetisation of hydrocarbon discoveries, with companies being allowed to begin commercial production straight away. According to the statement, the timelines provided in contracts with the government for oil and gas explorers are the maximum time allowed for development and monetisation.
“There are no restrictions on the monetisation of discovery at an early stage within these timelines; rather it would be in the public interest that discovery is monetized early as a step towards energy security of the country,” the statement said.
The regulator has also allowed companies to develop and monetise early-stage discoveries even before they complete the appraisal, acquire declaration of commerciality (DoC), and submit the development plan. Previously, companies were required to file documents to prove that the find was commercially viable after conducting appraisals. A development plan also needed to be filed with government approval needed.
DGH pointed out that companies can submit a development plan (Early Development Plan) upon making a discovery along with any relevant details, such as estimated cost and production profile, while requesting a Petroleum Mining Lease (PML).
“The production ensuing from such discoveries shall be considered as commercial production and payment of statutory levies, cost recovery, sharing of profit petroleum, revenue sharing, etc, as the case shall be as per provisions of respective production sharing contract (PSC)/revenue sharing contract (RSC) and other extant rules/regulations/guidelines,” the regulator said. However, while these rules have been relaxed, all other terms and conditions will remain as per the applicable provisions and other extant guidelines.