‘Should not discriminate between NELP and pre-NELP blocks’

Cairn India has urged the Petroleum and Natural Gas Ministry to make sure that the proposed new shale gas exploration policy offers the first right of refusal (RoR) to all currently operating blocks.

In a letter to the Petroleum Secretary, Vivek Rae, Cairn India CEO P. Elango said the draft shale gas policy being prepared by the government had a mechanism to give the first right of refusal to existing contractors holding oil and gas blocks.

“We understand that this RoR may be accorded to only the NELP blocks, and, as a consequence, not making this provision available to pre-NELP blocks. We believe that the draft shale gas policy, which solicited public comments in August 2012, was forward looking when it stated that the first right of refusal will be offered to the existing contractors. However, the discrimination between NELP and pre-NELP blocks as stated above will defeat the purpose,’’ he stated.

Mr. Elango suggested that the first right of refusal should be available to all currently operating blocks, irrespective of pre-NELP or NELP, to ensure consistency and uniform implementation of the shale gas policy. Similarly, he said existing licences/leases should have the exclusive rights to explore and develop all hydrocarbon resources encountered in a block and/or shale, which is just another form of hydrocarbon resources.

“Over-lapping licences/leases with simultaneous operations will pose significant risks and operational conflicts, leading to conflicting claims to resource ownership, sub-optimal utilisation of capital, hampering development of hydrocarbon molecules present in multiple forms,’’ he added.

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