The Cabinet Committee
on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi
has approved a policy for grant of extension to the Production Sharing
Contracts (PSC) signed by Government of India awarding Pre-NELP
Exploration Blocks to enable and facilitate investment to extract the
This policy will enable the contractors to extract not only the
remaining reserves but also plan to extract additional reserves by
implementing new technologies. In certain fields, additional recovery of
hydrocarbons can be obtained through Enhanced Oil Recovery / Improved
Oil Recovery (EOR/IOR) Projects and as such the production would extend
beyond the current duration of PSC. In the year 2016-17 (upto Feb.,
2017), the production from these oil & gas blocks, allotted in Pre- NELP
regime, is around 55 million barrel of oil and 965 MMSCM of natural gas.
The recoverable reserve from these blocks is estimated to be more than
426 million barrel of oil equivalent. During the extension period,
contractors are expected to make an additional investment of more than
USD 5430 million.
The policy will give boost to accelerate and supplement indigenous
production of hydrocarbon from existing blocks and act as a progressive
step towards achieving the target of 10% reduction in import of crude
oil by 2022. Among others, it includes oil and gas blocks in the State
of Rajasthan that account for about half of the country's onland
production of crude oil. Extension of these oil blocks will be major
stepping stone in sustaining and enhancing onland production.
The Government share of Profit Petroleum during the extended period of
contract would be 10% higher for these fields, thus bringing additional
revenues to Government.
In addition, the policy brings out detailed guidelines regarding grant
of extension, criterion for evaluation of request, time frame for
consideration of request, duration of extension etc. The extension of
these contracts is expected to bring extra investments in the fields and
would generate both direct and indirect employment. The policy aims at
bringing out clear terms of extension in fair and transparent manner so
that the resources can be expeditiously exploited in the interest of
energy security of the country besides improving the investment climate.