The liberalized economic policy adopted by the Government of India (GoI) in July 1991 sought to deregulate and de-license the core sectors (including the petroleum sector) with partial disinvestments of government equity in Public Sector Undertakings along with other measures. The upstream petroleum sector was largely a monopoly of public sector companies till then and the sector was being increasingly opened up to new operating companies in the private and joint sectors. Thus a need was felt to establish an agency that could effectively supervise the activities of all these companies in the national interest. The same was elucidated by the committee headed by late Dr. A. B. Dasgupta, which had reviewed the management of the Bombay High reservoir, had recommended the creation of an autonomous conservation board to oversee and review that oilfield development programs conform to sound reservoir engineering practices in line with national interests. Subsequently, a committee was constituted in 1992 under the chairmanship of late Shri P. K. Kaul, former Cabinet Secretary, to examine the need for restructuring ONGC’s organizational structure. This committee also recommended the establishment of an independent regulatory body called the Directorate General of Hydrocarbons (DGH) for discharging the regulatory functions of leasing and licensing, safety and environment and also development, conservation and reservoir management of Hydrocarbon resources in India.. Accordingly, Directorate General of Hydrocarbons was set up through GoI resolution No. O-20013/2/92/ONG-III dated 08.04.1993 under the administrative control of the Ministry of Petroleum and Natural Gas.
