Tuesday, 19, Mar, 2024
 
 
 
Expand O P Jindal Global University

Directorate General of Hydrocarbons (DGH)


IntroductionThe Directorate General of Hydrocarbons (DGH) was established in 1993 under the administrative control of Ministry of Petroleum & Natural Gas through Government of India Resolution. Objectives of DGH are to promote sound management of the oil and natural gas resources having a balanced regard for environment, safety, technological and economic aspects of the petroleum activity.

DGH has been entrusted with several responsibilities like implementation of New Exploration Licensing Policy (NELP), matters concerning the Production Sharing Contracts for discovered fields and exploration blocks, promotion of investment in E and P Sector and monitoring of E and P activities including review of reservoir performance of producing fields.

In addition, DGH is also engaged in opening up of new unexplored areas for future exploration and development of non-conventional hydrocarbon energy sources like Coal Bed Methane(CBM) as also futuristic hydrocarbon energy resources like Gas Hydrates and Oil Shales.

Creation

The liberalized economic policy adopted by the Government of India (GoI) in July 1991 sought to deregulate and de-license the core sectors (including the petroleum sector) with partial disinvestments of government equity in Public Sector Undertakings along with other measures. The upstream petroleum sector was largely a monopoly of public sector companies till then and the sector was being increasingly opened up to new operating companies in the private and joint sectors.

Thus a need was felt to establish an agency that could effectively supervise the activities of all these companies in the national interest. The same was elucidated by the committee headed by late Dr. A. B. Dasgupta, which had reviewed the management of the Bombay High reservoir, had recommended the creation of an autonomous conservation board to oversee and review that oilfield development programs conform to sound reservoir engineering practices in line with national interests.

Subsequently, a committee was constituted in 1992 under the chairmanship of late Shri P. K. Kaul, former Cabinet Secretary, to examine the need for restructuring ONGC’s organizational structure. This committee also recommended the establishment of an independent regulatory body called the Directorate General of Hydrocarbons (DGH) for discharging the regulatory functions of leasing and licensing, safety and environment and also development, conservation and reservoir management of Hydrocarbon resources in India.. Accordingly,

Directorate General of Hydrocarbons was set up through GoI resolution No. O-20013/2/92/ONG-III dated 08.04.1993 under the administrative control of the Ministry of Petroleum and Natural Gas.

Role & Functions
  • A nodal agency for implementation of NELP and CBM policy on behalf of Ministry of Petroleum & Natural Gas
  • To advise Ministry of Petroleum & Natural Gas on Exploration Strategies & Production Policies
  • To provide technical advice to the Ministry of Petroleum and Natural Gas on issues relevant to the exploration and optimal exploitation of hydrocarbons in the country
  • To review the exploration programs of companies operating under Petroleum Exploration Licenses granted under the Oilfields (Regulation and Development) Act, 1948 and the Petroleum and Natural Gas Rules, 1959 with a view to advising Government on the adequacy of these programs.
  • To evaluate the hydrocarbon reserves discovered and estimated by the operating companies
  • To advise the Government on the offering of acreages for exploration to companies as well as matters relating to relinquishment of acreage by companies
  • To review the development plans for commercial discoveries of hydrocarbon reserves proposed by the operating companies and advise Government on the adequacy of such plans and the exploitation rates proposed and matters relating thereto
  • To review and audit concurrently the management of petroleum reservoirs by operating companies and to advise on any mid-course correction required to ensure sound reservoir management practices in line with the optimal exploitation of reserves and the conservation of petroleum resources
  • To regulate the preservation, upkeep and storage of data and samples pertaining to petroleum exploration, drilling, production of reservoirs etc. and to cause the preparation of data packages for acreage on offer to companies
  • All other matters incidental thereto and such other functions as may be assigned by Government from time to time
  • Assist Government in Contract management functions
  • Exploration & Development of unconventional hydrocarbon resources like Gas Hydrate, Shale Gas/Oil and Oil Shale
  • Issue Essentiality Certificate for importing goods and services used in E&P sector to avail custom duty concessions
Human Resource

DGH is manned by highly skilled professionals of technical and scientific backgrounds with experience in Oil and Gas sectorMost of the manpower requirement of DGH is being catered thru’ deputation mode only from the National Oil Companies.

The key resource organizations for manpower sourcing of DGH are ONGC (Oil and Natural Gas Corporation), OIL (Oil India Limited), IOCL (Indian Oil Corp. Ltd), HPCL (Hindustan Petroleum Corporation Ltd.), BPCL (Bharat Petroleum Corporation Ltd.)& GAIL (Gas Authority of India Ltd).

DGH nourishes their knowledge and skills through regular training development interventions.

Funding

DGH is funded through OIDB (Oil Industry Development Board) grants. Details of OIDB may be accessed through OIDB website http://oidb.gov.in

Governance

Advisory Council

Directorate General of Hydrocarbons has an Advisory Council, which is appointed by the Government comprising of Chairman and members, who are eminent persons in the field of hydrocarbon exploration and production. The Advisory Council is serviced by the Directorate which is headed by a Director General who is also the Member Secretary to the Council.

Administrative Council

Government of India set up an Administrative Council on 02.02.2001 to guide and to take care of all administrative aspects of the functioning of DGH, through Office Memorandum No. O-32012/1/95-ONG-III dated 2.2.2001. The Administrative Council, in particular, takes decisions on various matters concerning establishment, budget and also undertakes periodical review of the functioning of DGH. It is headed by Secretary (P&NG) and has the following composition:

 

DGH Image

Activities

Awarding of Acreages

DGH is broadly bestowed with the responsibility of managing the various activities with regard to Indian E&P acreages. They are in terms of awarding exploration blocks, executing production sharing contracts, monitoring developed fields etc.

India has an estimated sedimentary area of 3.14 million square kilometers, comprising 26 sedimentary basins.

Conventional E&P Acreages:

Petroleum Exploration Licenses (PEL) for conventional domestic exploration & production of crude Oil and natural gas were granted under four different regimes over a period time.

1. Nomination Basis:

Till the end of 1970s, Indian E&P industry was dominated by the two National Oil Companies (NOCs) - ONGC and Oil to whom PELs were granted on nomination basis. Exploration was primarily confined to onland and shallow offshore.

2. Pre-NELP Exploration Blocks:

 

28 Exploration blocks were awarded to private companies between 1980 and prior to implementation of NELP where ONGC and Oil have the rights for participation in the blocks after hydrocarbon discoveries. In 1993, GoI offered blocks for geophysical and other surveys to update the information on hydrocarbon potential of India’s unexplored sedimentary basins. Once the surveys on these blocks were completed, they were to be offered in subsequent rounds of exploration. The second speculative survey round was launched in 1994 and the third round in 1995. The third round was called as Joint Venture Speculative Survey Round (JVSSR) with a provision of risk participation/cost sharing by DGH up to 50 %.

3. Pre-NELP Discovered Field or Development Rounds:

DGH Image

Government offered Petroleum Mining Lease (PML) of small/medium sized and discovered fields (proven reserves discovered by ONGC and Oil) to the private sector in August 1992 and October 1993. Production Sharing Contracts (PSCs) awarded during 1992-1993 had the distinctive feature of operators as private companies with ONGC/Oil as having Participating Interest. These rounds received overwhelming response  from various private E&P operators. 28 contracts were signed by Government of India for 29 discovered fields. Under this regime, all statutory levies including royalty, cess, customs duties, were etc. payable by Contractor or Coventures. Signature/production Bonus was payable by companies to ONGC & Oil for small fields (1992) and for Medium and Discovered fields it was payable by Coventures.

4. New Exploration Licensing Policy (NELP):

DGH Image

Under NELP, blocks were awarded to Indian, private and foreign companies through International Competitive Bidding process where NOCs viz. ONGC and Oil are also competing on equal footing. The Government has taken number of measures to bring in healthy competition and public participation by the way of NELP for exploration & production of Oil & gas in the country. NELP has not only accelerated the quest for hydrocarbon exploration, but has also brought the state of the art technology and efficiency of operations /management to the country.

CBM Acreages:

Coalbed Methane (CBM) is natural gas contained in coal. It consists primarily of methane, the gas we use for home heating, gas fired electrical generation and industrial fuel. CBM commonly is referred to as an “unconventional” form of natural gas because it is primarily stored through adsorption to the coal itself rather than in the pore space of the rock, like most “conventional” gas. The gas is released in response to a drop in pressure in the coal.

Coal Bed Methane (CBM), an unconventional source of natural gas is now considered as an alternative source for augmenting India’s energy resource. India has the fifth largest proven coal reserves in the world and thus holds significant prospects for exploration and exploitation of CBM. The prognosticated CBM resources in the country are about 92 TCF (2600 BCM) in 12 states of India. In order to harness CBM potential in the country, the Government of India formulated CBM policy in 1997 wherein CBM being Natural Gas is explored and exploited under the provisions of Oil Fields (Regulation & Development) Act 1948 (ORD Act 1948) and Petroleum & Natural Gas Rules 1959 (P&NG Rules 1959) administered by Ministry of Petroleum & Natural Gas (MOP&NG).

CBM blocks were carved out by DGH in close interaction with Ministry of Coal (MoC) & Central Mine Planning and Design Institute (CMPDI), Ranchi. Under the CBM policy, till date, four rounds of CBM bidding rounds have been implemented by MoP&NG, resulting in award of 33 CBM blocks [including 2 blocks on Nomination and 1 block through Foreign Investment Promotion Board (FIPB) route] which covers 16,613 sq.km out of the total available coal bearing areas for CBM exploration of 26,000 sq.km. To date, most CBM exploration and production activities in India is pursued by domestic Indian companies. Total prognosticated CBM resource for awarded 33 CBM blocks, is about 62.4 TCF (1767 BCM), of which, so far, 9.9 TCF (280.34 BCM) has been established as Gas in Place (GIP).

Technical Activities
Geophysical Survey

Policy for GEO-SCIENTIFIC DATA GENERATION for HYDROCARBONS in Indian sedimentary Basins and Agreement to carry out Non-exclusive Multi-Client Geo-scientific surveys/Activities. 29th May 2014

Amendment: In view of incorporations of suggestions after vetting of the Agreement of approved Policy for Geo-Scientific Data Generation for Hydrocarbons in Indian Sedimentary Basins by Ministry of Law & Justice, Government of India, the amended Agreement will supersede the earlier Agreement hosted on DGH website on 05.03.2014. The Ministry of Petroleum & Natural Gas, Government of India, has entrusted the DGH with the responsibility of getting Geo-scientific surveys/ activities conducted by any foreign/Indian company to generate new data and upgrade the available data on hydrocarbon potential of India, with the purpose of attracting foreign and Indian companies to explore and develop oil and gas fields in India. Service providers are invited for carrying out Non-exclusive Multi-Client Geo-Scientific Surveys/ Activities relating to Hydrocarbons in offshore and/or onland part of India. The Policy for Geo-Scientific Data Generation for Hydrocarbons in Indian Sedimentary Basins with Multi-Client Model Agreement (Click to View PDF) is available at http://petroleum.nic.in

Unconventional Oil and Gas
Clearances to E&P Operators
Monitoring of National Oil Companies

Historically Oil India Limited (OIL) and Oil and Natural Gas Corporation (ONGC) are the two major National Oil Companies(NOC) in India who were given exploration blocks on nomination basis during nomination period of India's E&P regime. DGH discharges the following activities with regard to monitoring of Nomination Blocks and NOCs.

  • Monthly, Quarterly and Annual production performance monitoring for nomination blocksfieldwise, with reasons for shortfall in all the activities and remedial measures.
  • PEL / PML examination, validation and monitoring. Half yearly review meeting of PELs and submission of report to MOP&NG. All cases related to PEL / PML i.e. Extension, grant, regrant, relinquishment, timely collection of G&G data of the relinquished blocks. Clearance of ECs of nomination PELs / PMLs.
  • Review of liquidation of sick and non-flowing wells on a monthly basis and submission of monthly report to MoPNG.
  • Policy for monetisation of Marginal fields on NOCs
  • Monitoring Annual work programme of nomination blocks of NOC
  • Four key areas have been identified for monitoring performance of NOCs by DGH which is being done from December 2015:
    • Accelerated exploration activities in nomination blocks
    • Monetization of Undeveloped discoveries
    • Action plane for Enhancement of recovery factor
    • Liquidation of sick wells/ Non-flowing wells
  • Replies to any other query from MoPNG pertaining to NOCs performance.

Petroleum Exploration License (PEL) and Mining Lease (ML) Monitoring of Nomination Blocks:

The PEL/ML group in DGH maintains the records,monitors and reviews the progress of all nomination PEL blocks, pertaining to National Oil Companies (NOC) i.e. ONGC & OIL. Request of time extension or conversion of whole or part area of these PELs is evaluated by the group on the basis of administrative and G&G data submitted by the NOCs and recommendations are forwarded to MoP&NG, as per merit of the case within provisions under P&NG Rules.

The group is also keeping records of nomination PML blocks of NOCs. Request of grant and regrant of these PMLs are also evaluated by the group and recommendations are forwarded to MoP&NG, as per merit of the case within provisions under P&NG Rules.

The group evaluates the data of discoveries within nomination blocks, submitted by NOCs and  keep the  record of discoveries.

E&P Data Management

Data Management: As per the petroleum and natural gas amendment rules 2006, every E&P operator in India is obliged to provide all data elements pertaining to the entire E&P value chain to Gov of India. This includes but not limited to geological, geophysical, petrophysical, geochemical, log, map, production data, tapes, cores, cuttings, other interpretaion and analytical reports etc.

DGH being the nodal agency of Ministry of Petroleum and natural gas on upstream E&P affairs, has started receiving E&P data from operators gradually subsequent to NELP regimes. Further one major role of DGH is to store and disseminate this precious oil field data of India. It is widely accepted today that E&P dataset is essentially a national asset. This is quite true in view of the ever increasing technological advancement in the field of data processing, data interpretation etc. Even age-old E&P dataset might give new results in view of new technological infrastructure. That is why safeguarding national E&P data has become a prime area of focus for DGH recently. Below is a brief account of different data classes available with DGH.

  • Cultural Data
  • Geological Data
  • Petrophysical Data
  • Seismic Data
  • Well Data
  • Production Data
  • Reservoir Data
  • Various Unstructured Data (Reports, Documents etc.)
Supporting MoPNG

To execute the role and responsibilities Directorate General of Hydrocarbon need to coordinate with multiple government agencies.Oil Industry development Board (OIDB):DGH is funded through OIDB (Oil Industry Development Board) grants and every year DGH presents its estimate for fund requirement and obtain necessary approval from OIDB.

Ministry of Environment, Forest and Climate Change (MoEF&CC)

Ministry of Home Affairs (MHA)

State Governments

Ministry of Defence

Ministry of Industry

Department of Revenue

Ministry of Coal and other PSUs.

Contact

Director General, Directorate General of Hydrocarbons Ministry of Petroleum & Natural Gas, OIDB Bhawan, Tower-A, Plot No-2, Sector-73 NOIDA, Uttar Pradesh-201301, India Email ID: dg@dghindia.gov.in

Website - www.dghindia.org

Help us improve! Please suggest corrections.
 

Download the LatestLaws.com Mobile App
 
 
Latestlaws Newsletter
 

Related judgement on Directorate General of Hydrocarbons (DGH)