The Petroleum Ministry in a notification relaxed rigid timelines prescribed in the Production Sharing Contract (PSC) for development and production of oil and gas.
"The Government of India hereby notifies Policy Framework for Relaxations, Extension and Clarifications at the Development and Production Stage under the PSC regime for early monetisation of hydrocarbon discoveries," the order said.
Operational flexibility has been provided in enforcing contracts by way of relaxing some of timelines prescribed for discoveries so that E&P activities do not suffer on account of excessive rigidity in decision making.

The PSC between the government and the explorer has rigid timelines for each stage of exploration and actions have been initiated against firms even if deadlines are missed by a day.
The notification said 3-6 months extension in the current 18-60 month timeframe for submission of declaration of commerciality (DoC) of discoveries, a prerequisite before investment plans can be finalised, can be given.
Also, the deadline for submission of investment plan for the discoveries too would be extended by up to six months.
The PSC provides for time period for submission of field development plan (FDP) for hydrocarbon discovery after DOC. There is no provision in the PSC for extension of this time period and non-acceptance of FDP due to late submission results in non-monetisation of discoveries.
Also, upstream regulator DGH has been given flexibility to accept discoveries for which operators had failed to provide prior notification to the government.
The notification also provided for reduction in committed work programme in case a block or its part is not available for exploration activities consequent to denial of permission by government agencies.
Reduction of minimum work programme (MWP) will be considered in case of "blocks overlapping with Special Economic Zone (SEZ), reserve forest, naval exercise areas, Defence Research and Development Organisation (DRDO) danger zones, National Parks, urban areas and firing ranges of police/armed forces," it said.
Currently, discoveries, mostly of Cairn, ONGC and GSPC are stuck because of lack of flexibility in timelines. These include 10 finds of Cairn in Rajasthan which have not been endorsed by the Directorate General of Hydrocarbons (DGH).      

Besides FDP approvals for more than two dozen finds are held up for some or the other reason. Fifteen discoveries lie abandoned in areas that have been relinquished by operators.

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