Press reports indicate that the union government formed an inter-departmental committee to decide on extending petroleum leases in producing oil and gas blocks.
Recently, the committee, chaired by oil ministry’s additional secretary & financial adviser (AS&FA) SC Khuntia, held its first meeting.
However, the committee did not discuss any particular case because of absence of a key member, reports suggest. Members of the committee include officials from ministries of oil, finance and law and the Planning Commission.
The oil and gas blocks that may be considered by the committee include BG-operated Panna-Mukta and Tapti oilfields, JTI’s Dholka oilfield and Cairn India’s Rajasthan block.
The move is part of the government’s initiative to set up a comprehensive system to extend oilfield contracts with private and public companies. This would facilitate the field operators such as Cairn India know well in advance if lease for the oilfield they operate will be extended for another term.
In order to decide whether or not it should invest huge amount on producing oil and gas, the company needs to know, before the lease expires, if it will continue to retain the field. Oilfields are leased to companies for 15-25 years.