Cabinet relaxes NELP, pre-NELP pact rules

Cabinet relaxes NELP, pre-NELP pact rules

News:

1. The Union Cabinet recently, approved the policy framework to streamline production sharing contracts signed in the pre-New Exploration Licensing Policy (NELP) and NELP periods.

Important facts:

2. Key decisions under the framework includes:

• Increasing the exploration period granted for blocks in the northeast.
• Easing the sharing of royalties with the developers of the blocks.
• Based on recommendations in ‘Hydrocarbon Vision 2030 for North East, the government has extended timelines by two years for exploration and one year for appraisal period.
• This was done while considering geographical, environmental and logistical challenges of the north eastern region.
• The government has also allowed marketing, including pricing freedom for natural gas to be produced from discoveries which are yet to commence production.
• The government has created an enabling framework for sharing of statutory levies including royalty and cess in proportion to the participating interest of the contractor in Pre-NELP Exploration Blocks.