New Delhi, April 21 (KNN) India’s oil and gas exploration sector has attracted over USD 36 billion in investment from nine rounds of the New Exploration Licensing Policy (NELP) conducted before 2014, according to a report commissioned by the Petroleum Ministry.
These investments have yielded 177 oil and gas discoveries across the country.
Under the NELP framework, which operated from 1999 to 2010, exploration blocks were awarded to bidders who promised maximum exploration work.
This model allowed companies to recover their investments from discovered oil and gas resources before sharing profits with the government.
The 254 blocks awarded during this period attracted USD 17.6 billion in exploration investment, resulting in 67 oil discoveries and 110 gas finds, with an additional USD 18.64 billion invested in development activities.
In 2016, the government replaced NELP with a revenue-sharing model, where blocks are awarded to firms offering the highest share of output to the government.
This transition was part of the Hydrocarbon Exploration and Licensing Policy (HELP), designed to address challenges faced under NELP and create a more investor-oriented regime.
The Revenue Sharing Contract (RSC) model was implemented to increase transparency, reduce operational complexities, and provide greater autonomy to operators.
Following this policy shift, 144 blocks were awarded through eight rounds of the Open Acreage Licensing Policy (OALP) between 2018 and 2022.
These blocks have seen USD 1.37 billion in exploration investment, leading to six oil discoveries and four gas finds.
Notable successes from the NELP era include Reliance Industries and BP’s KG-D6 block, which currently produces one-third of India’s natural gas, and ONGC’s KG-DWN-98/2 block.
Despite its achievements, the NELP regime faced challenges including delays in obtaining environmental and regulatory approvals, and disputes over cost recovery interpretations.
The RSC model now allows contractors and the government to share revenue from hydrocarbon sales at pre-agreed percentages, regardless of exploration and production costs.
Currently, only 29 of the original 254 NELP blocks remain active, with others relinquished due to lack of discoveries or finds too small for commercial development. Similarly, 128 of the 144 blocks awarded under OALP remain active.
(KNN Bureau)
