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102 INDIA'S HYDROCARBON OUTLOOK 2024-2025

6 6.1 Introduction

Since 1999, the New Exploration Licensing Policy
(NELP) had governed oil and gas exploration
and production. Its cornerstone, the Production
Sharing Contracts (PSCs), Operated on a
profit-sharing basis, necessitating extensive
governmental micromanagement for cost
New Investment control and revenue maximization. However,
proved
these
contracts
administering
Opportunities in problematic, spawning disputes and arbitrations
with the contractors. Issues encompassed
cost recovery limits, procurement challenges,
E&P Sector investment multiples calculation methodology,
and a lack of operator incentives for cost
containment, all detrimentally affecting profit
petroleum. Further, separate policies and fiscal
terms were formulated to administer various
hydrocarbon types, including CBM, shale oil/
gas, and conventional hydrocarbons, fostering
inefficiencies in resource exploitation. Under
NELP, exploration was confined to government-
offered blocks, constraining access to potentially
lucrative opportunities in other unexplored
areas. To tackle these systemic and operational
shortcomings, the government introduced a
Revenue Sharing Contract Regime, heralding
significant policy overhauls.
Two major policies were formulated to
implement the Revenue Sharing Contract
Mechanism are Discovered Small Field Policy &
Open Acreage Licence Policy.
6.2 Discovered Small Field Policy (DSF)

The Discovered Small Field (DSF) Policy was
introduced by the Government of India in 2015.
The Cabinet Committee on Economic Affairs
(CCEA) gave its nod to the policy on September 2,
2015, followed by formal notification on October