India’s Hydrocarbon Outlook 2024 142 A Report on Exploration & Production Activities New Investment Opportunities in E&P Sector 6 Introduction Since 1999, the New Exploration Licensing Policy (NELP) had governed oil and gas exploration and production. Its cornerstone, the Production Sharing Contracts (PSCs), operated on a profit-sharing basis, necessitating extensive governmental micromanagement for cost control and revenue maximization. However, administering these contracts proved problematic, spawning disputes and arbitrations with the contractors. Issues encompassed cost recovery limits, procurement challenges, investment multiples calculation methodology, and a lack of operator incentives for cost containment, all detrimentally affecting profit petroleum. Further, separate policies and fiscal terms were formulated to administer various hydrocarbon types, including CBM, shale oil/gas, and conventional hydrocarbons, fostering inefficiencies in resource exploitation. Under NELP, exploration was confined to government-offered blocks, constraining access to potentially lucrative opportunities Transitioning from NELP to the Revenue Sharing Contract (RSC) regime marks a pivotal shift in India’s oil and gas sector
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