The cabinet committee on economic affairs has approved Natural Gas Marketing Reforms.
The objective of the policy is to prescribe standard procedure to discover market price of gas to be sold by gas producers, through a transparent and competitive process, permit Affiliates to participate in bidding process for sale of gas and allow marketing freedom to certain Field Development Plans (FDPs) where Production Sharing Contracts already provide pricing freedom.
The policy aims to provide standard procedure for sale by contractor through e-bidding. This will bring uniformity in the bidding process across the various contractual regimes and policies to avoid ambiguity and contribute towards ease of doing business.
The policy has also permitted Affiliate companies to participate in the bidding process in view of the open, transparent and electronic bidding. This will facilitate and promote more competition in marketing of gas. However, rebidding will have to be done in case only affiliates participate, and there are no other bidders. The policy will also grant marketing freedom to the Field Development Plans (FDPs) of those Blocks in which Production Sharing Contracts already provide pricing freedom.
Steps taken so far:
The Government has taken transformative reforms in the upstream sector with a view to make investment easier focusing on ease of doing business. The Open Acreage Licensing Policy (OALP) which is invest or driven acreage auction process, has increased substantial acreages in the country. No blocks were allocated between 2010 and 2017 which has impacted the long-term viability of the domestic production. Since 2017, more than 1.6 lakh sq. km area under 105 exploration blocks has been allocated. This will ensure sustainability of the domestic production in long run.
Government brought a series of reforms in Gas sector and as a result investment of more than Rs. 70,000 crore is being made in the East coast. Gas production from East coast will contribute to Atma Nirbhar Bharat by meeting increasing energy needs of the country.
In February 2019, the Government implemented major reforms in upstream sector and brought paradigm shift by focusing on production maximisation. Acreages under OALP rounds are being allocated based on work programme only in Cat II and Cat III basins.
The domestic gas production has complete marketing and pricing freedom. All discoveries and field development plans approved after February 28, 2019 have complete market and pricing freedom.