In view of the considerable experience gained in awarding concessions for oil and gas exploration and production over the last 15 years under the New Exploration Licensing Policy (NELP), there is a need to look into how the policy design has impacted oil and gas exploration and production. At the request of the Minister of Petroleum and Natural Gas, the Prime Minister has approved the constitution of a Committee to review Production Sharing Contracts (PSCs) in Hydrocarbon exploration.

The composition of the Committee is:

(i) Dr. C. Rangarajan, Chairman, PM's Economic Advisory Council- Chairman

(ii) Shri B.K. Chaturvedi - Member, Planning Commission

(iii) Justice Shri Jagannadha Rao, Former Judge of the Supreme Court

(iv) Prof. Ramprasad Sengupta

(v) Shri J.M. Mauskar, former IAS Officer

(vi) Shri Joeman Thomas, MD, ONGC Videsh Ltd.

The Committee is to look into all modifications necessary for future Production Sharing Contracts so as to enhance production of oil and gas and the Government's share of this while minimizing procedures for monitoring the expenditure of producers.

The Terms of Reference of the Committee are:

(i) Review of the existing PSCs, including in respect of the current profit-sharing mechanism with the Pre-Tax Investment Multiple (PTIM) as the base parameter;

(ii) Exploring various contract models with a view to minimize the monitoring of expenditure of the contractor without compromising, firstly, on the hydrocarbons output across time and, secondly, on the Government's take;

(iii) A suitable mechanism for managing the contract implementation of PSCs which is being handled at present by the representation of Regulator/Government nominee appointed to the Managing Committee;

(iv) Suitable governmental mechanisms to monitor and to audit GOI share of profit petroleum;

(v) Structure and elements of the Guidelines for determining the basis or formula for the price of domestically produced gas, and for monitoring actual price fixation;

(vi) Any other issues relating to PSCs.