- Commercial Monitoring
- Essentiality Certificates
- Health Safety & Environment
- Assisting Government in formulation of Hydrocarbon related revenue policies
- NELP & CBM Bidding
- Improvements & Modifications in MPSC & BEC
- Evaluation of bids
- Economic evaluation of
- Development Plans
- Commerciality of discoveries
- Annual work program
- Validation of
- Annual Budget of PSC/CBM
- Appraisal Budget
- Review of
- Annual Accounts
- Cost recovery
- Valuation of petroleum for PSC
- Arms length validation
- Monitoring computation & remittances of
- Profit petroleum
- License Fee
- Cost of unfinished work program
- LD for extension of exploration phases
- Monitoring royalty from nominated blocks
- Review & custody of BGs and Performance Guarantees
- Financial assessment of assignees of PI
- Organizing and coordinating Government Audit of PSC
- Awarding of audit contract
- Briefing and assisting audit
- Reviewing & issuing audit exceptions
- Resolving & enforcing audit exceptions
- Coordinating CAG audit of DGH
- Physical verification of inventory/assets
- Coordinating with Legal on litigations
- Parliament queries
- MIS to GOI
- Other finance related matters of PSC
Government of India, through NELP invites all companies both Indian & foreign for
investment in E&P sector for securing energy needs of the country. With introduction
of New Exploration Licensing Policy, the upstream hydrocarbon industry in the country
has undergone a momentous change. Today, many companies view India as an attractive
business destination for oil & gas. We are also able to attract best technology
from across the globe in search of hydrocarbons. In this regard GOI has issued two
notifications which allow duty free import of goods for E&P operators.
These two notifications are as follows:
- Notification No. 21/2002 customs dated 01.03.2002 amended vide notification No.
26/2003 – customs dated:-01.03.2003 (oil & natural gas exploration)
- Notification No. 26/2003 customs dated:- 01.03.2003 ( coal bed methane exploration)
The EC department in DGH receives applications from various operators for duty free
import of goods. This department complete all formalities & issue certificates within
stipulated time frame. Besides, the department also issues NOC’s for transfer of
goods within the country.
The certificates are issued under the notification 214 AND 215, 216, 217 218-
214- Goods required for PEL/ML blocks granted by Government of India or state Government
to ONGC/OIL on notification basis.
215- Parts and raw materials required for manufacture of goods for offshore operation.
216- Goods required in connection with petroleum operations under taken under specified
217- Goods required for blocks under NELP.
218- Goods required in connection with (CBM operations).
- Issue of EC (Essentiality Certificate).
- Issue of NOC( No Objection Certificate) for transfer of goods.
- Extensions and amendments of ECs .
- Customs Confirmation.
- Audit on utilization of Ecs.
Environment and Safety
Exploration and production of hydrocarbons being a multi- dimensional exercise,
is likely to have some adverse impact on the natural environment. Therefore, there
is a need to minimize adverse effect on the environment, and also ensure that hydrocarbon
exploration and development activities are not hampered due to such constraints.
Accordingly, the Ministry of Environment and Forests, Government of India has formulated
legislations that are required to be followed by E & P companies that have operations
in environmentally sensitive areas.
A detailed Environmental Impact Assessment study is required to be carried out before
commencement of certain operations, in phases, so that the impact on biodiversity
and ecological sensitivity can be reduced through mitigating measures.
DGH ensures all mitigating efforts for protection of environment. DGH emphasizes
for a healthy HSE culture. The PSC stipulates for protection of the environment
This implies enforcement on the following by the contractor:
- contractor shall conduct its Petroleum operations with due regard to concerns with
respect to protection of the environment and conservation of natural resources and
shall in particular:
- Employ modern oilfield and petroleum industry practices and standards including
advanced techniques, practices and methods of operation for the prevention of environmental
damage in conducting its petroleum operations.
- Take necessary and adequate steps to:-
- Prevent environmental damage and, where some adverse impact on environment is unavoidable,
to minimize such damage and consequential effects thereof on property and people.
- Adequate compensation for injury to persons or damage to property caused by the
effect of petroleum operations.
- Comply with the requirements of applicable laws and the reasonable requirements
of the government from time to time.
The impact of E&P activities on biotic & abiotic environment may result due to the
- Major Oil & Chemical spillage
- Routine or Accidental discharges of waste
- Blow - outs / Explosion
- Flaring of Gases
- Chemicals Used
- Improper disposal of Effluents generated
- Land subsidence & Wetland Losses
Ministry of Environment & Forest (MOEF) , Central Pollution Control Board (CPCB)
& other government agencies monitor and regulate the above hazards through Environment
Protection Act, 1986 and other applicable regulations / conventions.
DGH also monitors environmental aspects of petroleum operations. DGH coordinates with MOEF, CPCB and
other concerned authority / organizations on environmental issues and also assists
MOP&NG on such matters.
Environmental Impact Assessment studies are carried out prior to commencement of
seismic survey, drilling operations and the development of the field for production.
DGH has undertaken two studies, one through Central Mining Research Institute to
assess land subsidence in a gas field in Gujarat and the other one through Wildlife
Institute of India, Dehradun to assess impact on the breeding of Olive Ridley Sea
Turtles in the entire east coast of India.
Study Reports :.
Report on Subsidence
DGH has always been pro active in taking suitable measures to address environmental
issues before hand. DGH initiated a study on probable land subsidence due to extraction
of oil & natural gas from shallow reservoir in Bheema Gas field (Block CB-ONN-2000/2),
near Surat Gujarat, where the gas reservoir is at a shallow depth (about 200 Mtrs
below the ground surface level), apprehending a possibility of Land subsidence.
Two subject expert agencies, Central Mining Research Institute (CMRI), Dhanbad
employing the method of leveling survey and the other, a team of Civil Engineering
Department of IIT Mumbai employing GPS carried out the study in parallel to acquire
The Land Subsidence Monitoring Programme has been carried out before commencement
of Gas production since February 2004. The same is being continued for further monitoring
in future as well.
Further more, an additional area NS-3 in the same field NS-A of the block has been
included in the study owing to higher withdrawal of gas.
A. Land Subsidence investigation conducted by CMRI from August 2004 to June 2005
led to the following conclusion and recommendations (copy of the report is enclosed):
- There is no any land subsidence movement following 1.6 – 4.7 kg/cm2 pressure
depletion at shallow gas reservoirs.
- Irregular ground movements occurred due to seasonal affect on black cotton soil
in which the subsidence monitoring stations are fixed.
- It is recommended to monitor ground movements thrice in a year to see further effect
of pressure depletion of shallow gas reservoir on the ground surface from safety
point of view as five villages and roads are lying above the reservoir.
- It is also recommended to monitor water level in the 30 selected tube/ dug wells
monthly as it will give a prior indication of ground movements due to shallow gas
B. Further, Land Subsidence investigation conducted by CMRI between November 2006
and November 2007 led to the following conclusion and recommendations, (copy of
the report is enclosed):
- Maximum subsidence, slope, compressive & tensile strains due to 7.2- 12.5 kg/cm2
pressure depletion in shallow gas reservoir were 162 mm, 1.73mm/M, 1.42mm/M & 0.75mm/M
- Maximum subsidence, slope, compressive & tensile strains due to 7.2- 12.5 kg/cm2pressure
depletion in deep gas reservoir were 37 mm, 0.78mm/M, 0.36mm/M & 0.20mm/M respectively.
- There is no change in the water level data except seasonal variation.
- All the villages lying above the gas reservoir are safe as the magnitude of ground
movements are well within the safe limits.
- It is recommended to monitor ground movements thrice in a year to see the further
effect of pressure depletion of gas reservoirs on the ground surface for the safety
aspects of villages and agricultural fields.
- It is also recommended to monitor water level in the 30 selected tube/dug wells
monthly as it will give a prior indication of damage of sub –strata over the reservoir
due to gas exploitation.
C. Land Subsidence investigation conducted by the team of IIT Mumbai between February
2004 and May 2006 led to the following conclusion and recommendations, (copy
of the report is enclosed):
“It can be concluded that during these nine campaigns from February 2004 to May
2006, only few seasonal local minor negligible level changes are detected
in the area under study, indicating that overall the area is stable. Also the trend
in the behavior of some points, which had been observed in a particular region,
has also now been proven to be due to seasonal variations, and no resultant subsidence
is observed. However, close monitoring is required in future, especially
at some points to estimate the trends, and the probable changes.”
In light of the above, it is explicitly clear that no resultant subsidence is observed
even when the reservoir is at very low depth (about 200 Mtrs below the ground surface
level) and at a higher withdrawal rate of gas.
Olive Ridley Turtles
Ministry of Environment & Forests (MOEF) constituted a multi disciplinary expert
group (MEG) to review the impact on sea turtles due to exploration and development
activities. The MEG has recommended carrying out a tracking study on the migratory
Olive Ridley Sea Turtles. Wildlife Institute of India (WII), Dehradun has been identified
to carry out the study on behalf of MOEF and a contract has been signed between
WII & DGH. It has been planned to carry out satellite telemetry tracking study with
70 Platform Transmitter Terminals (PTT)) in a span of two years for the following
- To estimate abundance and spatial distribution of Olive Ridley turtles to determine
their critical marine habitat requirements during the breeding season.
- To study the movement of satellite tagged turtles in the coastal waters in East
Coast of India.
- 3. To track the long range migratory route of the adult Olive Ridley turtles and
to determine the non breeding area in east coast in India for nesting.
Dr.B.C.Chaudhary, Project In charge, Wildlife Institute of India and Dr. C.S. Kar,
Sr. Research Scientist of the O/o Chief Wildlife Warden, Orissa are supervising
As part of the PTT deployment exercise, 30 female olive ridley turtles were deployed
with Platform terminal transmitters (PTT) between March and May 2007. Locations
of each tagged turtles were received through the ARGOS Satellite Tracking System.
All turtles moved southwards and few reached southeast coast of Sri Lanka and appeared
to move in to the Indian ocean when last location was received. Analysis on movements
of PTT fixed turtles revealed that majority of the turtles are using Orissa coast
for longer period of time .However, all the PTTs stopped giving signals by the end
of September 2007. The reason of such low response could be due to mortality of
turtles due to fishing in deep sea, battery failure, antenna failure or other technical
faults. Although the exact reason for non response of PTTs is being ascertained.
Subsequent batch of 40 female olive ridley turtles would be deployed with PTTs during
2008- 09 for study.
Beach profiling: In order to understand the present status of the geo morphology
of the nesting beaches, an assessment and subsequent monitoring of the mass nesting
beaches in orissa was taken up. The information gathered during august 2007 is :
In all the three study sites very high beach erosion was observed. Much of the ingression
by the sea was observed in the Gahirmatha site where vegetation along 6 km stretch
has been washed away. The Devi rookery is comparatively less eroded as compared
to the two sites.
Developmental activities: It is now a proven fact that sea turtles have an extremely
high affinity to their breeding grounds, and therefore any loss or reduction of
even single rookery can have serious impacts on the whole population. Therefore,
it was necessary to clearly understand the critical habitat requirement of olive
ridley turtles so that both conservative and developmental activities along the
coast of Orissa and their possible impact on sea turtles and their nesting habitats.
The entire coastline of Orissa was surveyed at 10 km distance stretches and activities
whether existing or proposed are documented from direct observation as well as from
secondary sources of information.
There are many minor and major ports are coming along the Orissa coast along with
fishing harbors and jetties, Coastal tourism infrastructures, fisheries developments,
coastal highway and more importantly plantations close to high tide line of the
sea. The large amount of dredging of shipping channel may have impacts on the turbidity
of the water and light penetration as well as on the benthic habitat and therefore,
potential impacts on the entire food chain, including sea turtles. The increase
in the number of fishing harbors and jetties means that more of the mechanized fishing
fleets and greater fishing activities in the coastal water which might lead to increased
incidental catch. Plantations along the coast not only reduce the nesting space
but also are detrimental to the nesting of sea turtles in more than one way. Coastal
highways may directly affect sea turtles by reducing the space available for them
to nest and disturbance during egg laying activities with round the clock vehicular
traffic and presence of human and feral animals on the beach, not to target the
However, all the above assessments are preliminary in nature and require an in depth
environmental study on the possible impact of developmental activities on sea turtles
and their habitat along the Orissa coast, which is proposed to be taken up during
October 2007 to September 2008 once again.
Further, as desired by MOEF, the scope of the study has been enlarged with inclusion
of studies on socio economic concerns of fishermen and other stake holders residing
in the region to evolve an appropriate strategy for conflict resolution and wise
use of marine resources in the region at no extra cost.
EIA Notification 2006 :.
While performing Advisory role briefly the following type of functions are involved:
- Legal opinion on the issues referred to legal section in connection with various
activities being undertaken by DGH.
- Vetting of Contracts and Memorandum of Understanding (MOU).
- Legal comments on behalf of DGH to MOP&NG in connection with interpretation of Petroleum
Laws & relevant rules framed there under and on other issues which are being referred
time to time by MOP&NG to DGH.
- Drafting of correspondence with contractors in connection with various issues being
raised by contractors under PSC’s.
- Legal vetting of Bank Guarantees, Amendments to PSC’s etc.
Handling Of Litigation :.
- Handling of Arbitration matters before Arbitral Tribunal.
- Handling of Court Cases before various Courts. It may be further elaborated that
the legal officer of DGH while handling Arbitration and Court matters, has to perform
following type of jobs:
Legal scrutiny of Arbitration Award or Court judgment for advising further action
i.e. whether the Govt. should accept the particular Arbitration Award or judgment
or to file appeal challenging the said award or Court judgment before the court
of competent jurisdiction.
- Recommendations for appointment of outside counsels.
- Preparation of parawise comments in close liaison with the concerned section on
facts given by claimant or the petitioner as the case may be.
- Legal scrutiny of parawise comments.
- Liaison with advocates for drafting of reply on behalf of GOI/DGH.
- Vetting of written statements / replies to be filed on behalf of GOI / DGH in Arbitration
/ Court matters.
- Instructions to Advocates for suitable steps in Arbitration and Court matters.
- Attending the hearings before Arbitral Tribunal or Court along with outside counsels
and representative from the concerned departments.
- Payment of fees to Arbitrators and outside counsels.
- Liaison with Ministry to appraise the development in the concerned matter and to
obtain necessary approvals from Ministry wherever required.
Acts,Rules and Regulations :.
- Arbitration & Concilation Act,1996 (View PDF)
- Petroleum & Natural Gas Rules,1959 (View PDF)
- Petroleum Tax Guide,1999 (View PDF)
- Petroleum Tax Code,1997
- Petroleum Pipeline Act,1962
- PNG Amendment Rules,2003 (View PDF)
- PNG Rules,1959
- Rule Environment Safety (View PDF)
- Site Restoration Fund Scheme,1999 (View PDF)
- Oil Industries Development Act,1974 (View PDF)
- Oil Fields Regulations & Development Act,1948