Home :: DGH's Activities -> Other Activites Thursday , June 20, 2013


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Destination India
  • Commercial Monitoring
  • Essentiality Certificates
  • Health Safety & Environment
  • Legal

  • 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

    • Pricing
    • Arms length validation

  • Monitoring computation & remittances of

    • Profit petroleum
    • Royalty
    • PLP
    • 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


  • Arbitration


  • Coordinating with Legal on litigations


  • Parliament queries


  • MIS to GOI


  • Other finance related matters of PSC
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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:
  1. Notification No. 21/2002 customs dated 01.03.2002 amended vide notification No. 26/2003 – customs dated:-01.03.2003 (oil & natural gas exploration)
  2. 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 contracts (Pre-NELP)
217- Goods required for blocks under NELP.
218- Goods required in connection with (CBM operations).

Broad Activities
  • 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.


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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 under its Article 14.

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 following hazards:

  • 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.


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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 geodetic data.

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):
  1. There is no any land subsidence movement following 1.6 – 4.7 kg/cm2 pressure depletion at shallow gas reservoirs.
  2. Irregular ground movements occurred due to seasonal affect on black cotton soil in which the subsidence monitoring stations are fixed.
  3. 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.
  4. 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 exploitation.

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):
  1. 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 respectively.
  2. 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.
  3. There is no change in the water level data except seasonal variation.
  4. All the villages lying above the gas reservoir are safe as the magnitude of ground movements are well within the safe limits.
  5. 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.
  6. 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 objectives:
  1. To estimate abundance and spatial distribution of Olive Ridley turtles to determine their critical marine habitat requirements during the breeding season.
  2. To study the movement of satellite tagged turtles in the coastal waters in East Coast of India.
  3. 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 the study.

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 illumination problem.

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.

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EIA Notification 2006 :.

View PDF
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Legislations :.

www.envfor.nic.in
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Advisory :.

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.


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Handling Of Litigation :.

  1. Handling of Arbitration matters before Arbitral Tribunal.
  2. 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:
  • 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.
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.

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Acts,Rules and Regulations :.


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