Context- Recently government announced the opening of the fifth oil and gas block bid round, offering 11 areas for bidding on revamped fiscal terms.

• Seven onland blocks were offered in the fourth round of Open Acreage Licensing Policy (OALP) under HELP regime,

Open Acreage Licensing Policy (OALP)

• It gives an option to a company looking for exploring hydrocarbons to select the exploration blocks on its own, without waiting for the formal bid round from the Government.
• Under Open Acreage Licensing Policy (OALP), a bidder intending to explore hydrocarbons like oil and gas, coal bed methane, gas hydrate etc., may apply to the Government seeking exploration of any new block (not already covered by exploration). 
• The Government will examine the Expression of Interest and justification. If it is suitable for award, Govt. will call for competitive bids after obtaining necessary environmental and other clearances. 
• OALP was introduced vide a Cabinet decision of the Government dated 10.03.2016, as part of the new fiscal regime in exploration sector called HELP or Hydrocarbon Exploration and Licensing Policy

What are key features of HELP?

• India has announced HELP, which offers single license to explore conventional and unconventional oil and gas resources.
• The new policy also gives the investors the much needed freedom in pricing and marketing for crude oil and natural gas.
• There will be a uniform licensing system which will cover all hydrocarbons, under a single license and policy framework.
• Contracts will be based on ‘biddable revenue sharing’.  Bidders will be required to quote revenue share in their bids and this will be a key parameter for selecting the winning bid.
• An ‘Open Acreage Licensing Policy’ will be implemented whereby a bidder may apply to the Government seeking exploration of any block not already covered by exploration. This will enable a faster coverage of the available geographical area.
• A concessional royalty regime will be implemented for deep water (5%) and ultra-deep water (2%) areas. In shallow water areas, the royalty rates shall be reduced from 10% to 7.5%.
• The contractor will have freedom for pricing and marketing of gas produced in the domestic market on arms length basis.
• To safeguard the Government revenue, the Government’s share of profit will be calculated based on the higher of prevailing international crude price or actual price.