Directorate General of Hydrocarbons special cell to expedite work at 150 oil blocks

NEW DELHI: The oil ministry has told the Prime Minister's Office it will set up a special cell at the Directorate General of Hydrocarbons to expeditiously resolve regulatory issues to fast-track exploration and production works in over 250 blocks.

There are 113 oil and gas discoveries in blocks auctioned under nine rounds of new exploration licensing policy but only six of them are producing oil and gas, the oil ministry said while presenting status of discoveries to PMO, three government officials with direct knowledge of the matter said.

Oil ministry explained while some discoveries are in different stages of development, some are delayed pending regulatory approvals. In certain instances, delay is because exploration firms failed to meet timelines while some of the discoveries could not be monetised because they were not commercially viable, officials quoting the oil ministry's presentation to PMO said.

Similar problems are observed in pre-Nelp blocks, which were licensed to energy firms without competitive bids before 1998. Out of 54 discoveries made in these blocks licensed before Nelp, only 14 are put on-stream. PMO, which is directly monitoring progress in oil and gas projects, is concerned about the slow pace of development especially because India imports over 80% crude oil it processes.

"PMO is concerned about tardy progress in exploration and production of oil and gas especially after several private firms have complained about regulatory and bureaucratic hassles," a government official with direct knowledge of the matter said requesting anonymity.