India's Hydrocarbon Outlook – 2022-2023

174 DGH: 3 DECADES OF UNLOCKING INDIA'S HYDROCARBON POTENTIAL 8.2 Forest Clearance: Forest Clearance is a crucial process in India as it requires permission from the Govt of India to clear or divert forestland for non-forest purposes, such as mining, industrial projects, highways, and other infrastructure development projects. This approval is governed by the Forest (Conservation) Act, 1980 which regulates the diversion of forestland for non-forest purposes. The approval is granted only after a detailed examination of the proposal and its impact on the forest and its biodiversity, as well as the rights of local communities. A multitude of policy changes/additions have taken place in the last 5 years which have facilitated the E&P O&G industry to a great extent. The narrative placed below explain the said reforms in detail: 8.2.1 Year 2019 September 2021: Guidelines specific to hydrocarbon sector for undertaking seismic surveys and exploratory drilling in forest areas The MoEF&CC in its OM dated 30.09.2019 clarified that for the purpose of seismic survey, the maximum permissible number of shot holes may be fixed as 80 per sq km of maximum size of 6.5 inch each so that reliable data can be collected. The permission for such activity can be granted at State level. Further, Ministry also clarified that State Govt shall not insist on approval under section 2(iii) of FCA, 1980 at the time of PEL. However, the user agencies shall take all statutory permission before executing of lease/breaking of land. 8.2.2 Year 2021 August 2021: FCA, 1980 Non-applicability to Extended Reach Drilling (ERD) locations ERD is a directional drilling technique of very long horizontal wells. In order to maximise a well's production and drainage capacity, ERD attempts to: a) reach a bigger region from a single surface drilling location; and b) keep a well in a reservoir for a longer distance. DGH and E&P industry pursued the case with the MoEF&CC that since ERD technology is a safe technology and has been adopted world-wide, it may not attract the provisions of FCA, 1980 as the actual forestland remains non-diverted. A report has been submitted to the MoEF&CC and is hoped to see the light of the day soon. 8.2.3 Year 2022 June 2022 FC Rules 2022: The MoEF&CC notified the FC Rules 2022 on 28th June, 2022. It is conferred by Section 4 of the FCA, 1980 and in supersession of the FC Rules, 2003. If the E&P operations involve diversion of forest land, the FC under FCA, 1980 is required. FC Rules have been renotified on 28.06.2022 to give special considerations to the E&P industry.