Proposed Revenue Sharing Model in Oil & Gas Sector could be a Game Changer

The central government is about to finalize a new policy for auction of oil and gas blocks during the ongoing financial year. Suggestion for this new policy is expected to come by 30^th of November.

• The main agenda of this new policy will be to have a revenue sharing model
• A consultation paper on this policy was put out earlier by the government which specifically focuses on having a universal licensing policy that will help big players/operators to explore all possible areas of oil and gas resources like methane, shale gas and oil, tight gas, iron ore etc.
• It is aimed at helping investors and companies to have “ease of doing business”
• The proposed scheme will be based on Open Acreage Licensing Policy which will allow companies to explore areas of their choice.
• Also, under this revenue sharing model, companies will have to specify the revenues they will share with the government at different stages of production.
• This new policy plans to provide rights to companies over hydrocarbons and providing other marketing freedoms. 

Source: Business Standard