DMPQ: What is HELP? What are its key provisions?

HELP is the new Hydrocarbon exploration Licensing policy. The key features of HELP are as follows:

 

  • India has announced HELP, which offers single license to explore conventional and unconventional oil and gas resources.
  • The new policy also gives the investors the much needed freedom in pricing and marketing for crude oil and natural gas.
  • There will be a uniform licensing systemwhich will cover all hydrocarbons, under a single license and policy framework.
  • Contracts will be based on ‘biddable revenue sharing’. Bidders will be required to quote revenue share in their bids and this will be a key parameter for selecting the winning bid.
  • An ‘Open Acreage Licensing Policy’will be implemented whereby a bidder may apply to the Government seeking exploration of any block not already covered by exploration. This will enable a faster coverage of the available geographical area.
  • A concessional royalty regime will be implemented for deep water (5%) and ultra-deep water (2%) areas. In shallow water areas, the royalty rates shall be reduced from 10% to 7.5%.
  • The contractor will have freedom for pricing and marketingof gas produced in the domestic market on arms length basis.
  • To safeguard the Government revenue, the Government’s share of profit will be calculated based on the higher of prevailing international crude price or actual price.

 

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