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Home/Current Affairs/Open Acreage Licensing Policy (OALP)

Open Acreage Licensing Policy (OALP)

9 Oct 2023

Context:

  • The government is expected to open the ninth round of bidding under the Open Acreage Licensing Policy.

What is Open Acreage Licensing Policy?

  • Open Acreage Licensing Policy (OALP) is a policy reform introduced by the Government of India (GoI) to provide relief to hydrocarbon companies. 
  • Under it the company can undertake prospecting for fuels in areas the GoI does not notify.
    • Prospecting refers to drilling the selected area to check the availability of hydrocarbon fuels. 
  • The OALP is used by companies engaged in extracting hydrocarbon fuels to locate new areas where hydrocarbon fuels can be obtained. 
  • Under the Open Acreage Licensing Policy, Companies can put in an expression of interest (EoI) for any area throughout the year but such interests are accumulated thrice in a year. The areas sought are then put on auction.
  • It is part of the Hydrocarbon Exploration and Licensing Policy.
Hydrocarbon Exploration and Licensing Policy (HELP) 

  • HELP is an exploration and production policy of the Government of India that replaced the New Exploration Licensing Policy (NELP). 
  • Objective: To enhance domestic oil and gas production by intensifying exploration activity and investment. 
  • Four Components of HELP;
    • Uniform license for exploration and production of all forms of hydrocarbon: This streamlines licensing, as the government requires only a single uniform license for all forms of hydrocarbons, which includes gas from coal mining. 
    • Open acreage licensing policy: Through this, an explorer can study and bid for any block in accordance with its competitive advantage.
    • Revenue sharing model: This encourages cost efficiency in mining operations by replacing the profit-sharing contract established by NELP. The contractor pays the government a share of its revenue (net of royalty) as per the contract.
    • Marketing and pricing freedom: The contractor can sell crude oil in the domestic market through a transparent bidding process. 


News Source: Business Standard

 

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UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
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Designed as per recent trends of Prelims questions
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