Report No. 24 of 2014 - Compliance Audit on Hydrocarbon Production Sharing Contracts, Union Government, Ministry of Petroleum and Natural Gas

Date on which Report Tabled:
Fri 28 Nov, 2014
Date of sending the report to Government:
Government Type:
Union Department
Sector Power & Energy


In 1991, the Government of India (Gol) decided to invite foreign and domestic Private Sector Companies to participate in the development of discovered oil and gas fields, and in some cases, fields partially developed by the National Oil Companies (NOCs) - Oil and Natural Gas Corporation Limited (ONGC) and Oil India Limited (OIL). The Gol announced (1997) the New Exploration Licensing Policy (NELP), under which NOCs compete with Private Sector Companies for obtaining Exploration & Production (E&P) licenses through a bidding process, instead of getting them on nomination basis.

The Ministry of Petroleum and Natural Gas (MoPNG), the Directorate General of Hydrocarbons (DGH) and the Contractor /Operator of the blocks are the main stakeholders in the PSC. The MoPNG is, inter alia, responsible for the exploration and production of petroleum and natural gas, including the administration of the Oilfields (Regulation and Development) Act, 1948. MoPNG is assisted by the DGH, which was established in April 1993 with the objective of promoting sound management of Indian petroleum and natural gas resources having a balanced regard for the environment, safety, technological and economic aspects of petroleum activities. The Contractor is required to carry out petroleum operations and has the right to recover cost and expenses in case of a successful commercial discovery leading to production, as per terms of the PSC.

The PSCs between the Gol and the Contractor(s) for specific fields / blocks provide the contractual basis for petroleum operations, cost recovery, profit sharing and other aspects. The content of these PSCs varies substantially among those for discovered fields, pre-NELP exploratory blocks and NELP blocks, and even within different NELP rounds (with Model PSCs being drawn up for each NELP round).

Download Audit Report

Back to Top