India's oil and gas sector has undergone significant transformation over the past decade, driven by policy reforms aimed at attracting investment, enhancing energy security, and reducing dependency on imports. Key initiatives like the New Exploration Licensing Policy (NELP), Open Acreage Licensing Policy (OALP), and Discovered Small Fields (DSF) policy have played pivotal roles in revitalizing the sector.

New Exploration Licensing Policy (NELP): Introduced to encourage private and foreign investment in exploration and production, NELP has seen nine bid rounds before 2014, attracting over Rs. 3,07,368 crore (US$ 36 billion) in investments and resulting in 177 oil and gas discoveries. The policy allowed for cost recovery before profit sharing with the government, but faced challenges like clearance delays and disputes under the Production Sharing Contract (PSC) regime.

Open Acreage Licensing Policy (OALP): Launched to provide greater flexibility to investors, OALP allows companies to select blocks for exploration without waiting for formal bid rounds. From 2018 to 2022, eight OALP rounds attracted Rs. 11,697 crore (US$ 1.37 billion) in investments, leading to six oil and four gas discoveries. Major international players like British Gas, Cairn Energy, Eni, BHP Billiton, and BP have participated, bringing advanced technologies and capital.

Hydrocarbon Exploration and Licensing Policy (HELP): In 2016, the government introduced HELP, replacing the PSC model with a Revenue Sharing Contract (RSC) model. This shift aimed to reduce operational complexities, increase transparency, and provide greater autonomy to operators, aligning with global best practices. Under RSCs, contractors and the government share revenue from hydrocarbon sales at pre-agreed percentages, regardless of exploration and production costs.

Discovered Small Fields (DSF) Policy: To monetize small and marginal fields, the DSF policy was introduced in 2015. As of now, 51 out of 85 DSF contract areas are active. The policy has attracted about 29 new players to the Indian Exploration and Production (E&P) sector. The government continues to drive exploration with ongoing DSF bid rounds, signing contracts for 28 blocks in the OALP-IX round and offering a 10th round.

Oil Field Amendment Bill 2024: The recent amendment to the Oil Field Act has made small oil fields more investor-friendly by allowing 100% foreign participation, greater exploration flexibility, and improved financial terms. This move is expected to attract global investors, introduce cutting-edge technology, and strengthen India's energy security.

Conclusion: India's strategic policy reforms in the oil and gas sector have significantly enhanced its attractiveness to both domestic and international investors. By fostering a competitive environment and simplifying regulatory frameworks, India is well-positioned to boost its domestic production, reduce import dependency, and achieve long-term energy self-sufficiency.

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