(ET)
The oil ministry is considering withdrawing from management committees of oil and gas fields, crucial bodies comprising nominees of the ministry, upstream regulator and the contractor, which oversee field development plans, annual work programme and budgets.
The government hopes the proposed move would enhance ease of doing upstream business, but industry executives say that the presence of bureaucrats in these committees also has some benefits. The oil and gas fields auctioned under the previous policy are guided by a production-sharing contract, which provides for a management committee to ensure that the spending proposed and incurred by the operator of the field did not adversely affect the government’s revenue interests.
There are about 250 production-sharing contracts operational in the country. For each contract, there’s a management committee comprising one nominee each from the oil ministry, the directorate general of hydrocarbons (DGH), and all companies with stake in the field. DGH is the technical arm of the oil ministry and also acts as the upstream regulator.
