What is Hydrocarbon Exploration and Licensing Policy (HELP)?

Hydrocarbon Exploration and Licensing Policy or HELP is the new exploration and production policy of the government in the hydrocarbon sector.

The government in March 2016 has adopted the HELP in place of the NELP that was existing for almost a decade. NELP was the first policy step introduced in 1997-98 to open up the hydrocarbon sector to private and foreign players. The new initiative is expected to boost investment and production in the hydrocarbon sector including crude and natural gas by eliminating some of the problems persisted in the NELP.

Following are the four main features of HELP:

  1. A uniform or single license framework for exploration and production of all forms of hydrocarbon such as oil, gas, coal bed methane etc.
    1. an open acreage policy,
    2. easy to administer revenue sharing model and
    3. marketing and pricing freedom for the crude oil and natural gas produced

Uniform licence proposed in the policy will enable the contractor to explore conventional as well as unconventional oil and gas resources including CBM, shale gas/oil, tight gas and gas hydrates under a single license.  Open Acreage Policy is expected to help the Exploration and Production companies choose the blocks from the given area. 

HELP also brings significant changes in the sharing of proceeds from production. For sharing the output from production sites, the government has adopted revenue sharing model in the place of the old profit based production sharing model. The new model is easy to administer.

Contracts under NELP were based on the concept of profit sharing where profits are shared between Government and the contractor after recovery of cost. Here, it became necessary for the Government to scrutinize cost details of private participants and this often led to many delays and disputes. Under the new regime, the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas etc. This is expected to support the “Ease of Doing Business”.

In offshore projects, royalty will be reduced to compensate the high cost.

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