New Exploration & Licensing Policy(NELP) introduced in 1998 was a major initiative of Government of India(GOI) to open the upstream sector for private participation, completely stop the nomination of acreage, create a level playing field between NOC's & IOC's, dismantle administered prices.
Under NELP, DGH
collects data, carves out blocks, and sells the data packages. The Ministry of Petroleum & Natural Gas(MOPNG
) invites the bids.
The bids are technically evaluated by DGH according to a previously specified Bid Evaluation Criterion(BEC). These recommendations are vetted by MOPNG and an empowered committee. The winning consortium signs a previously specified Production Sharing Contract(PSC) which governs the agreement between the Government and the consortium.
There is no signing bonus. Costs are recoverable from actual production. Oil can be sold at market driven negotiated price within India. Profit oil is shared according to a bid formula. There exists a royalty regime.
All PSC's of any round of bidding are identical. Government invites suggestions on changes required. These are discussed in various forums, and wherever possible the suggestions are incorporated in the Model PSC(MPSC) of the following round. MPSC is made public along with bid documents and in due course becomes PSC.
All participants in the consortium are required to sign a Joint Operating Agreement(JOA) , which governs operating procedures.
There have been the following rounds of NELP
There have been significant changes in BEC and MPSC in different rounds, following the discussions in different forums. The present proposals for the next round can be accessed on dghindia.gov.in