No backing down at oil ministry over extension policy

Vol 10, PW 2 (18 May 06) People & Policy

Bureaucrats in the oil ministry laugh at suggestions that the new extensions policy is inspired by MNCs coveting acreage held by domestic companies.

No MNC or anybody else is behind this policy, says a source (who confirms that the policy will be implemented as announced). Why should there be any consultations with the operators asks the ministry.

We are not amending the PSC. Discussions take place only when we plan to amend the PSC.

In this case, says the ministry, the PSCs did not allow for any extensions at all beyond the six months allowed when a well is being drilled. Continues the ministry: We have liberalised the policy so that extensions can extend to 18 months.

Not only do the PSCs allow no extensions, they also do not give any set offs for delays because of time taken to get official approvals. Under the earlier situation, we hear, extensions were being given on a case-by-case basis.

This element of discretion has been removed. Extensions are now given as a matter of policy.

More importantly, complete set offs will be given for time lost due to delays in getting official approvals. Given this, adds the ministry, beggars cant be choosers.

The new policy on extensions, points out the ministry, rewards operators who perform their work programme commitments and make discoveries and cracks down on non-performers who either do no work or whose geological models have failed. Adds our source: If you perform and succeed you wont be asked to relinquish areas.

You will also get other concessions. In the case of blocks on which no work is being done or on which no discoveries have been made, says the ministry, we are open to allowing in small independents, MNCs, anybody who can perform and make discoveries.

The general idea, we are told, is that nobody will be allowed to sit on fallow acreage. We do not allow fallow acreage.

If companies want to sit on fallow acreage and lay eggs and then complain they are being ousted by MNCs then so be it. Adds the ministry: We are only enforcing the present contracts.