Ministry of Petroleum and Natural Gas launches Open Acreage Licensing Programme: UPSC Daily Important Topic | 25 December 2021

■  Ministry of Petroleum and Natural Gas launches Open Acreage Licensing Programme-

✓Recently, the Government launched the Open Acreage Licensing Programme(OALP)Bid Round-VII for International Competitive Bidding in continuation of its aggressive programme for exploration and adhering to the prescribed timelines.

✓Successful award of Round-VII Blocks would add a further 15,766 sq. km of exploration acreage and cumulative acreage under OALP and it will be increased to  207,692 sq. km.

● About Open Acreage Licensing Policy (OALP):

✓It is the most crucial part of the Hydrocarbon Exploration and Licensing Policy (HELP).

✓It provides a single, uniform Licence for exploration and production of conventional as well as unconventional hydrocarbon resources.

● Features:

✓The Freedom to carve out acreages of choice under OALP bid rounds has been given to contractors.

✓The revenue-sharing model is used for offering fields.

✓Producers have complete marketing and pricing freedom for crude oil and natural gas produced.

● Benefits of OALP:

✓It has reduced multiple licences and procedures for extracting different hydrocarbons even from the same well.

✓Brought in a quantum jump in the Exploration & Production sector.

✓The successful roll-out of the HELP regime, followed by OALP Bid Rounds, has led to an increase in exploration acreages in India.

● Concerns Related to OALP:

✓Lesser involvement of Private Players.

✓Public Sector Companies like Oil and Natural Gas Corp (ONGC) and Oil India (OIL) are the major winners of the bidding rounds.

✓Lack of clarity in Government Policy and Regulations.

● Higher Tax and Cess:

✓Proposal by the Petroleum Ministry to reduce the oil cess charge on domestic production of crude has been rejected by the Finance Ministry.

✓Less Participation of Foreign Companies:

✓Indian attempts to attract Foreign Energy Giants are not yielding expected results.