HC notice to Centre on PIL against single license for exploration of all hydrocarbon resources
The Madras High Court on Thursday issued notice to the Centre and others on a PIL seeking to declare grant of a single license for exploration and extraction of all hydrocarbon resources as ultra vires and null and void. A bench comprising Justice M Sathyanarayanan and Justice N Seshasayee issued notice to the Ministry of Petroleum and Natural Gas, the Director General of Hydrocarbons and two companies which have been awarded the contract in Tamil Nadu. It posted the matter to November 7 for further hearing. In the public interest litigation filed by ‘Poovulagin Nanbargal” (Friends of Earth), a trust, submitted the Marginal Field Policy (MFP) Resolution published in the central Gazette on October 31, 2015, which provided for single license to enable exploration and production operators to explore and extract all hydrocarbon resources. The resources were covered under the Oilfields Regulation and Development Act, 1948, and Petroleum and Natural Gas (PNG) Rules, 1959. The policy was approved by the Union Cabinet on September 2, 2015, with the objective of bringing marginal fields to the production at the earliest so as to augment the domestic production of oil and gas, it said. Consequently, the Director General of Hydrocarbons in a release on November 21, 2016, stated that 42 companies had submitted 134 e-Bids under the policy (now called Discovered Small Field Policy), the PIL stated. Later, it was announced that licenses were granted in respect of 31 approved contract areas — 23 on land and eight offshore, the petitioner said. The PIL alleged that these licenses ought to have been granted with the stipulation in tune with the definition of petroleum under Rule 3(k) of the PNG Rules. However, the awardees were allowed freedom to explore conventional and unconventional oil and gas resources and any other resources to be identified in future which will fall within the definition of Petroleum and Natural Gas under the PNG Rules, it said. The PIL stated that paragraph 2 of the MFP Resolution was contrary to the provisions of Rule 3(k) read with Rule 4 of the PNG Rules and hence required to be declared null and void.
RIL-BP to kick off India’s first gas e-auction next month
ndia’s natural gas market will witness its first e-auction next month when Mukesh Ambani-led Reliance Industries and its partner UK energy major BP, kicks off bidding for gas from their $5-billion offshore project in the east coast. This will be the first time that gas produced from a domestic field will be e-auctioned, a practice the Narendra Modi government had introduced for giving out telecom spectrum and coal blocks after the Supreme Court struck down the allocation methods followed earlier. “We expect the independent agency appointed for conducting the auction will be able to conduct the auction on October 10 once the pre-requisites are completed,” a senior BP executive told TOI. CRISIL Risk and Infrastructure Solutions (CRIS) will conduct the auction online on a web-based platform and the kick-off price will be benchmarked to 9% slope of Brent. RIL-BP is holding the sale under the policy provision of giving producers marketing and pricing freedom for gas from geographically difficult fields. For other fields, the government earmarks the quantity of gas to various industries and the price is set according to a 2014 formula, which the industry says is often non-remunerative. Industry players said the auction by RIL-BP could prove to be a touchstone for the Centre’s proposed gas exchange and indicate whether the domestic gas market is ready for large-scale competitive pricing. The government is working to raise the share of natural gas in the country’s energy basket from 6% to 15%. RIL-BP is initially offering 5 mcmd (million cubic metres per day) of gas expected to flow from mid-2020 from R-Series fields in the KG-D6 block off the Andhra coast. This is part of three sets of discoveries in the block — R-Cluster, Satellites and MJ — being developed for a peak of 30 mcmd.