Hydrocarbon Exploration And Licensing Policy [HELP]

By : Neha Dhyani

Updated : May 26, 2022, 11:16

The cabinet approved the Hydrocarbon Exploration And Licensing Policy [HELP] in March 2016, intending to boost openness and reduce staff discretion in issuing hydrocarbon licences. Under one licence, contractors will be able to discover traditional and non-conventional oil and natural gas such as unconventional hydrocarbon, CBM, gas hydrates, and tight gas. In the most recent auction round, India offered 14 blocks (about 30,000 sq km) for oil and gas development, with winning bidders able to carve out regions for drilling. This is the second round of the current Hydrocarbon Exploration And Licensing Policy [HELP].

What is Hydrocarbon Exploration And Licensing Policy [HELP]?

The initiative is intended to increase natural gas and oil output, attract further investment, and create jobs. As previously mentioned, it also wants to promote openness and reduce operational authority in awarding hydrocarbon licences. E&P Companies will be able to select units from a specified place under Open Acreage.

Origin of help in Hydrocarbon Exploration And Licensing Policy [HELP]

The New Exploration Licensing Policy's Drawbacks (NELP)

  1. Oil and natural gas, coal-bed methane and shale oil and gas all have policies.
  2. Multiple policies resulted in inefficient natural resource extraction. If a different type of hydrocarbon is discovered while exploring for one, it will require a separate licence, which will add to the expense.
  3. The question of gas pricing has been the subject of litigation. Previously, there existed the option of gold coating the capital and manipulating profit' to defraud the authorities.
Important UPSC Topics
IAS ExamUPSC Exam
UPSC Exam PatternIAS Age Limit
UPSC BooksUPSC Syllabus in Hindi
UPSC Admit CardUPSC Prelims
IAS SyllabusUPSC Question Paper
UPSC Cut OffUPSC Mains

Hydrocarbon Exploration And Licensing Policy [HELP] - Framework of NELP

By implementing the following improvements, the Hydrocarbon Exploration And Licensing Policy [HELP] kept the framework of NELP while addressing the loopholes and shortcomings of the previous policy:

  1. A single licence is issued for all hydrocarbons under a specific policy and licencing framework.
  2. Any E&P business intending to participate on an investigation block presently not encompassed by any research licence given to another party must use open acreage licencing. The government looks at the justification and expression of interest. After getting appropriate approvals from ecological and other agencies, the government invites competitive bids if it is suitable for the award.
  3. Contracts will be awarded based on bids, and bidders must cite profit sharing at "lower revenue point" and "higher revenue point." Linear interpolation should calculate profit share at any block grants between these two locations. This criterion gives the most weight to the bidder who shares the most revenue with the government at net present values.
  4. A revenue-sharing framework will cover deepwater and ultra-deepwater zones based on a concessional royalty. These areas will be royalty-free for the first seven years of operation. The subsidised royalty rates will be 5percent of the total for deepwater and 2% of its total for ultra-deepwater sectors. Because of the risk/return ratio of the development block, shallow water areas will receive concessional rates of 7.5 per cent instead of 10%.
  5. The contractor has complete control over the pricing and marketing of hydrocarbons generated and sold domestically. The market's revenue share is computed using global crude prices or the current price.

☛ Also Read: Current Affairs 2022 PDF

By streamlining the petroleum exploration licence and reducing import dependence, the new Hydrocarbon Exploration And Licensing Policy [HELP] will encourage the formation of oil and gas exploring businesses. As a result, new job possibilities in the oil and gas sector will emerge. There will be fewer disagreements and bribery as the government's discretionary control over petroleum exploration licences will be limited.

More Current Affairs Topics
India China Border DisputeIndia-Canada Relations
India Bhutan RelationsIndia Bangladesh Relations
India Australia RelationsIndex of Industrial Production [IIP]
Inclusive Development Index [IDI]Amendments to the Indian Constitution
Importance of Self AssessmentImperialism

FAQs on Hydrocarbon Exploration And Licensing Policy [HELP]

Q1. What is the aim of the Hydrocarbon Exploration And Licensing Policy [HELP]?

The cabinet approved the Hydrocarbon Exploration And Licensing Policy [HELP] in March 2016, intending to boost openness and reduce staff discretion in issuing hydrocarbon licences.

Q2. What is Hydrocarbon Exploration And Licensing Policy [HELP]?

The Hydrocarbon Exploration And Licensing Policy [HELP] initiative is intended to increase natural gas and oil output, attract further investment, and create jobs.

Q3. In which year was Hydrocarbon Exploration And Licensing Policy [HELP] initiated?

The cabinet approved the Hydrocarbon Exploration And Licensing Policy [HELP] in March 2016.

Q4. How will Hydrocarbon Exploration And Licensing Policy [HELP] in generating jobs?

With Hydrocarbon Exploration And Licensing Policy [HELP], new job possibilities in the oil and gas sector will emerge, and fewer disagreements and bribery as the government's discretionary control over petroleum exploration licences will be limited.