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Open Acreage Licensing Programme

Focus: GS III- Industry and Infrastructure (Industrial Policy, Infrastructure, Government Policies and Interventions)

Why in News?

Recently, the Government of India has launched the OALP Bid Round-VIII, offering 10 blocks for International Competitive Bidding.

Open Acreage Licensing Programme (OALP)

  • The Hydrocarbon Exploration and Licensing Policy (HELP) replacing the erstwhile New Exploration Licensing Policy (NELP) was approved in March 2016 and the Open Acreage Licensing Policy (OALP) along with the National Data Repository (NDR) were launched in June 2017 as the key drivers to accelerate the Exploration and Production (E&P) activities in India.
  • Under OALP, companies are allowed to carve out areas they want to explore oil and gas in.
  • Companies can put in an expression of interest (EOI) for any area throughout the year but such interests are accumulated thrice in a year. The areas sought are then offered for bidding.
  • This policy is different from the past where the government identified areas and offered them for bidding.
  • The successful roll-out of the HELP regime, followed by OALP Bid Rounds, has led to an increase in exploration acreages in India.
  • OALP has helped in removing red-tapism and brought in a quantum jump in the Exploration & Production sector.

About Hydrocarbon Exploration & Licensing Policy (HELP)

  • The Hydrocarbon Exploration & Licensing Policy (HELP), which adopts the Revenue Sharing Contract model, is a giant step towards improving the ‘Ease of Doing Business’ in the Indian Exploration and Production (E&P) sector.
  • It comes with attractive and liberal terms like reduced royalty rates, no Oil Cess, marketing and pricing freedom, round the year bidding, freedom to investors for carving out blocks of their interest, a single license to cover both conventional and unconventional hydrocarbon resources, exploration permission during the entire contract period, and an easy, transparent and swift bidding and awarding process.
  • Bid Round-IV onwards, bidding rounds are being carried out under the further liberalized policy terms, which focused on production maximization with higher weightage to Committed Work Programme in Category I basin and no revenue share bids required for less explored Category II & III basins.
  • Category-I basins have established reserves and fields that are already producing while Category-II basins are ones that have contingent resources pending commercial production. Category-III basins are ones that have prospective resources awaiting discovery.

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