OIL Current Affairs

National Seismic Programme launched in Odisha

The Union Government has launched National Seismic Programme (NSP) to trace hydrocarbon resources like oil and natural gas in Mahanadi basin.

It was launched by Union Minister of State (MoS) for Petroleum and Natural Gas at Taranga village under Soro block in Balasore district of Odisha.

Significance

Mahanadi basin has been chosen as the first location for the roll out of this national-level programme. The outcome from the NSP help in better understanding of the sub-surface with petroleum systems across wider geological ages especially in sedimentary basins to explore hydrocarbon reserves in Odisha.

What is National Seismic Programme (NSP)?

  • NSP aims to undertake a fresh appraisal in all sedimentary basins across India in order to have better understanding of the hydrocarbon potential of the country.
  • Under this programme, high-resolution 2D seismic Acquisition, Processing and Interpretation (API) survey will be conducted across India especially in the sedimentary basins.
  • The survey will be conducted by state owned Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL). The survey project will be completed by March 2019.
  • ONGC will conduct the survey of around 40,835 Line Kilo Meter (LKM) in onland part of 26 sedimentary basins in 18 states/UTs including Mahanadi basin.
  • While OIL will carry out the survey of 7,408 LKM in the North eastern states of Assam, Manipur, Arunachal Pradesh, Mizoram and Nagaland.

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Union Cabinet approves MFP for Development of Hydrocarbon discoveries

Union Cabinet has approved Marginal Fields Policy (MFP) to aunction small and marginal unexploited hydrocarbon discoveries by state owned oil companies.

Decision in this regard was taken by Union Cabinet Meeting chaired by Prime Minister Narendra Modi in New Delhi.

Key facts about Marginal Fields Policy (MFP)

  • 69 unexploited oil fields owned by Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) will be opened for competitive bidding to private and foeign companies based on revenue sharing model.
  • These discoveries for many years were not able to monetize due to isolated locations, small size of reserves, technological constraints, high development costs and fiscal regime.
  • These discovered oil fields were considered as marginal fields as they were not developed and thus were of lower priority.
  • Private exploration companies will be able to submit bids for exploiting these oil fields.
  • The policy allows the successful bidder to sell these oil fields at the prevailing market price of gas, rather than at an administered price.

It should be noted that this is first time revenue sharing model introduced in oil sector.

Implication: This decision is expected to stimulate investment in oil exploration sector as well as increase domestic oil and gas production. It will also help in monetizing 70,000 crore rupees worth of resources form these unexploited oil fields

Earlier Methodology: The earlier exploration contracts were based on the concept of profit sharing model. Under this method it had become necessary for the government to scrutinize cost details of private participants which had resulted in delays and disputes.

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