Union Cabinet Nods to the new Hydrocarbon Exploration and Licensing Policy

The Union Cabinet, presided by Prime Minister Narendra Modi approved the Hydrocarbon Exploration and Licensing Policy (HELP).

Flash Points

• The HELP will replace the New Exploration Licensing Policy (NELP)
• It will enhance domestic oil and gas production, bring substantial investment in the sector and generate sizable employment. The policy also targets the enhancement of transparency and reduction of administrative discretion
• It will provide Uniform license for exploration and production of all forms of hydrocarbon including CBM, shale gas/oil, tight gas and gas hydrates under a single license
• The concept of Open Acreage Policy will enable Exploration & Production (E&P) companies choose the blocks from the designated area
• The earlier contracts were based on the concept of profit sharing where profits are shared between Government and the contractor after recovery of cost
• Under the new regime, the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas etc
• A graded system of royalty rates have been introduced, in which royalty rates decreases from shallow water to deepwater and ultra-deep water.
• The royalty rate for onland areas have been kept intact so that revenues to the state governments are not affected
• Cess and import duty will not be applicable on blocks awarded under the new policy.
• The policy also provides for marketing freedom for crude oil and natural gas produced from these blocks