In a major development, Petroleum Ministry has allowed private upstream companies like Reliance Industries and Cairn India to start producing oil and gas from discoveries even before securing approval for field investment plans. To enable monetization of the finds contained with an already producing area, Oil Minister M Veerappa Moily approved 5-page guidelines for production and development of oil and gas discoveries.
As per the guidelines approved, each company will be allowed the option to submit an integrated development plan (IDP) encompassing multiple new discoveries. Presently, every discovery is treated as a separate factory and operators are required to first get approval for commercial viability and then seek approval for an investment plan, called a field development plan (FDP).
However, now the Ministry has permitted submission of declaration of commerciality (DOC) and FDP/IDP together by subsuming DOC within the FDP/IDP. Further while, the cases with single discovery will be termed as FDP and cases of multiple discoveries will be termed as IDP.
Thus, with these new guidelines, the contractor, for early monetisation of new discoveries in a mining lease (or producing) areas, may be allowed by the Management Committee (MC) to produce hydrocarbons from the notified new discoveries, pending approval of FDP/IDP. However, this will be subjected to condition that the contract has taken approval of the MC for the annual work programme, budget and program quantity for such new discoveries. Additionally, recovery of all costs associated with new recoveries pending approval of FDP/IDP, despite their inclusion in the annual work program and budget, will not be permitted.
As per the guidelines approved, each company will be allowed the option to submit an integrated development plan (IDP) encompassing multiple new discoveries. Presently, every discovery is treated as a separate factory and operators are required to first get approval for commercial viability and then seek approval for an investment plan, called a field development plan (FDP).
However, now the Ministry has permitted submission of declaration of commerciality (DOC) and FDP/IDP together by subsuming DOC within the FDP/IDP. Further while, the cases with single discovery will be termed as FDP and cases of multiple discoveries will be termed as IDP.
Thus, with these new guidelines, the contractor, for early monetisation of new discoveries in a mining lease (or producing) areas, may be allowed by the Management Committee (MC) to produce hydrocarbons from the notified new discoveries, pending approval of FDP/IDP. However, this will be subjected to condition that the contract has taken approval of the MC for the annual work programme, budget and program quantity for such new discoveries. Additionally, recovery of all costs associated with new recoveries pending approval of FDP/IDP, despite their inclusion in the annual work program and budget, will not be permitted.
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