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Cabinet delegates powers to oil, finance ministers to award oil blocks

NEW DELHI: The Union Cabinet has empowered the ministers of petroleum and natural gas and finance ministries to approve the award of the blocks and contract areas to successful bidders under Hydrocarbon Exploration and Licensing Policy (HELP) and Open Acreage Licensing Policy (OALP) after International Competitive Bidding (ICB) to expedite the process and boost ease of doing business.

The move may reduce the time taken to complete the process of awarding a block or area for exploration and production of oil and gas to companies since thus far, only the Cabinet headed by Prime Minister had powers to approve it.

“In line with the government initiative of ease of doing business, the union cabinet chaired by Prime Minister Narendra Modi has given its approval for delegating the powers to Minister of Petroleum and Natural Gas and Finance Minister to award the Blocks/Contract Areas to successful bidders under Hydrocarbon Exploration and Licensing Policy (HELP) after International Competitive Bidding (ICB) based on the recommendations of Empowered Committee of Secretaries (ECS),” an official statement said. 

The cabinet acknowledged that the process under New Exploration Licensing Policy (NELP) was “quite lengthy and time-consuming.” NELP was replaced by HELP and the government aims to award block under the programme twice in a year.

“This delegation of powers will expedite the decision-making process on awarding blocks and give a boost to the initiative of ease of doing business,” the government statement said.

Currently, the government is in the process of first round of OALP. In the first round, 55 blocks with an area of 59282 square km spreading across 11 states have been offered for bidding. 

India is the third largest importer of oil in the world and aims to import dependency in oil and gas by 10% by 2022. Oil exploration and production in the country has been slow as new awards take time. Simplifying the process may reduce the time taken in decision making and help the country step up its domestic production.