Cabinet approves policy framework for exploitation of unconventional hydrocarbons

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Union Cabinet has approved policy framework to permit exploration and exploitation of unconventional hydrocarbons such as Shale oil/gas, Coal Bed Methane (CBM) etc. It will be carried out under existing Production Sharing Contracts (PSCs), CBM contracts and Nomination fields to encourage existing contractors in licensed or leased area to unlock full potential of unconventional hydrocarbons in existing acreages.

Significance

With this policy, there will be complete shift from One hydrocarbon Resource Type to Uniform Licensing Policy which is presently applicable in Discovered Small Field (DSF) Policy and Hydrocarbon Exploration & Licensing Policy (HELP).

Benefits of this Policy Framework

It will enable the realization of prospective hydrocarbon reserves in existing contract areas which otherwise would have remain unexplored and unexploited. It will give impetus to new investment in exploration and production (E&P) activities and chances of finding new hydrocarbon discoveries and increasing domestic production. It will also spur exploration and exploitation of additional hydrocarbon resources giving impetus to new investment, economic activities, additional employment generation and thus benefitting various sections of society. This will also lead to induction of new, innovative and cutting-edge technology and forging new technological collaboration to exploit unconventional hydrocarbons.

Background

Under existing contractual regime of PSCs, existing contractors are not allowed to explore and exploit CBM or other unconventional hydrocarbons in already allotted licensed or leased area. Similarly, CBM contractors are not allowed to exploit any other hydrocarbon except CBM. Acreages held at present by various contractors in PSCs and CBM blocks and National Oil Companies (NOCs) in nomination regime constitute a significant part of India’s sedimentary basin.

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