The Planning Commission has expressed reservations over the proposed move of the Petroleum and Natural Gas Ministry to amend the production sharing contract (PSC) regime and empower the Managing Committee (MC) to take decisions on relaxations, extensions and clarifications at the development and production stage.

The Planning Commission has conveyed to the Petroleum Ministry that since the issues mentioned in the proposed amendments to the PSC come under the inter-Ministerial in nature, these powers ought to be vested in the existing Empowered Committee of Secretaries (ECS). The proposal floated by the Petroleum Ministry says that in future relaxations to these provisions may be disposed by an Empowered Committee for E&P contracts chaired by the Petroleum Minister. However, the officials believe that now a decision on this matter is likely to be taken by the new government which is likely to take over in May after the general elections.

As of now, an empowered mechanism exists in the ECS which was set up when the NELP policy itself was approved by the Cabinet in 1998. The Petroleum Ministry has desired that the status of this mechanism be raised from the ECS to the Minister chaired mechanism. The present proposal empowers the Managing Committee to exercise powers in specified matters and the Director General of Hydrocarbons (DGH) in the others.

``The present proposal is supported with the above observations as indecision in the existing discoveries has led to a logjam on their development and other activities of the PSCs,'' a senior Petroleum Ministry official said.

The Planning Commission, in its note to the Joint Secretary (Exploration), has warned that present proposal dilutes the existing provisions of the PSC.

``Earlier, such cases came to the government which considered the same through the inter-Ministerial mechanism. Now, the powers are being delegated to the MC. While, it needs to be ensured that such relaxations should be granted only on genuine grounds, the consent of DGH as chair of MC should be governed by transparent decision making,'' the Planning Commission note adds.

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