Policy Considerations Around India’s Upstream Reforms
India’s government is attempting to revive investments in its upstream sector, following several years of decline. In May 2016, it ran a ‘Discovered Small Fields’ (DSF) auction of marginal fields held by its National Oil Companies (NOCs), and in July 2017 launched its first open acreage licensing round under its new ‘Hydrocarbon Exploration Licensing Policy’ (HELP), which changed the upstream fiscal regime, going forward, from a profit-sharing to a revenue-sharing model. These efforts are related to achieving a policy objective to reduce energy imports by 10 per cent by 2022 over current levels (PIB, 2017a). Given the proximity of the 2022 target, other models are being considered. As the majority of licensed acreage (around 65 per cent of 214, 881 km2) is estimated to be held by the NOCs, with around 60 per cent of this held by Oil and Natural Gas Corporation (ONGC) (Sen, 2016), India’s government is exploring options to increase production from NOCs’ acreage, through contracting external capital and expertise, and/or releasing some of this acreage for development. Nomination acreage – which was the earliest prospective acreage identified by the NOCs – is also seen as containing some of the country’s valuable producing assets. This Insight seeks to contribute to the discussion by addressing the following research questions: what are the lessons from India’s previous efforts on upstream sector policy? And, what are some of the policy considerations given similar international experience?