Open Acreage Licensing Policy (OALP)

Why in News?

The Directorate General of Hydrocarbons (DGH) had recently announced the completion of the first round of bidding under its new Open Acreage Licensing Policy (OALP).




Open Acreage Licensing Policy (OALP) gives an option to a company looking for exploring hydrocarbons to select the exploration blocks on its own, without waiting for the formal bid round from the Government.


Under Open Acreage Licensing Policy (OALP), a bidder intending to explore hydrocarbons like oil and gas, coal bed methane, gas hydrate etc., may apply to the Government seeking exploration of any new block (not already covered by exploration).  The Government will examine the Expression of Interest and justification. If it is suitable for the award, Govt. will call for competitive bids after obtaining necessary environmental and other clearances.


What distinguishes OALP from New Exploration and Licensing Policy (NELP) of 1997 is that under OALP, oil and gas acreages will be available round the year instead of cyclic bidding rounds as in NELP. Potential investors need not have to wait for the bidding rounds to claim acreages.


Hydrocarbon Exploration and Licensing Policy (HELP) is a policy adopted by Government of India in 2016 indicating the new contractual and fiscal model for the award of hydrocarbon acreages towards exploration and production (E&P). HELP is applicable for all future contracts to be awarded.

HELP replaced the  New Exploration Licensing Policy (NELP).


Salient Features

i)Uniform License: It provides for a uniform licensing system to cover all hydrocarbons such as oil, gas, coal bed methane etc. under a single licensing framework.


ii)Open Acreages: It gives the option to a hydrocarbon company to select the exploration blocks throughout the year without waiting for the formal bid round from the Government.


iii)Revenue Sharing Model:  The earlier fiscal system of production sharing contract (PSC) is replaced by an easy to administer “revenue sharing model”.Under the new regime, the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas etc.


iv)Marketing and Pricing Freedom has been granted, subject to a ceiling price limit.


Source-The Hindu.