An oil ministry-led inter-ministerial committee has been set up to look into the extension of the tenure of leases under the existing production-sharing contracts signed with oil and gas exploration companies, reports Pranav Nambiar in New Delhi. Blocks are generally leased out for 15-25 years but companies say that the time frame is too short as in many cases the commercial production extends beyond 25 years.
Some of the companies requesting an extension include JTI, which has sought a 10-year extension of its 18-year-old Dholka and Wavel (Gujarat) oilfield lease, and Cairn India, which has sought a 10-year extension of its Barmer, Rajasthan, lease that ends in 2020, said an official.
The extension of the contract before their expiry would allow them to determine the kind of financial commitments they would be willing to make to further develop the block. Companies invest crores to produce oil and gas and clarity on lease tenure would enable them to use their resources more efficiently, said the official.
