BP leads the way with call for E&P rules change

Vol 16, PW 4 (06 Sep 12) People & Policy

BP is leading the charge against government opposition to the drilling of exploration wells in producing oil and gasfields, or under development through a Mining Lease.

Emboldened by its new position as the only oil major active in India’s E&P sector, BP country head Sashi Mukundan wrote to oil secretary Girish Chaturvedi on August 22 accusing the oil ministry of breaching the law. Mukundan says the Oilfield (Regulation and development) Act, 1948 (ORDA), “provides ample enabling clauses for taking up exploration in the development area” and cites BP activity in the North Sea, Egypt, Gulf of Mexico, Angola, Indonesia and Alaska to press the government to relax its opposition to exploration in discovered areas under development.

“In the North Sea, contractors have the right to drill any exploration target in the development area,” he said. “In Egypt drilling exploration wells under a development lease is standard; in Indonesia an operator is expected to have a sustainable exploration programme after the FDP; in the Gulf of Mexico exploration programmes are ongoing under the production lease; and in Angola exploration in the development area in encouraged.

” Mukundan says PSCs governed by NELP are ambiguous on the right to carry out exploration activity during development but that the law, in the shape of the Oilfield (Regulation and development) Act, 1948 (ORDA), is crystal clear that exploration can and should be permitted, ‘for the full enjoyment of the lease’. “Most importantly,” says BP, “the PSC in Article 32.1 states that the PSC is to be ‘governed and interpreted in accordance with the laws of India’.

” Unclear is how the government will respond to BP’s request for a sympathetic hearing…