DGH: The Foreman of the Indian Oil & Gas Industry

In the year 1993, the office of the Directorate General of Hydrocarbons (DGH) was established with the vision “To be an upstream advisory and technical regulatory body of international repute, creating value for society through proliferation and dissemination of E&P knowledge, optimal hydrocarbon resources management and environment-friendly practices”. The DGH works under the administrative control of the Indian Ministry of Petroleum & Natural Gas through a Government of India Resolution. The prime objective of the DGH is to create and promote a strong framework for managing oil and natural gas resources. In the process, there must be a balanced regard for the environment, safety, technological and economic aspects of this industrial landscape.

“Our country will become the key driver of global energy demand in the next twenty-five years.  Our energy consumption of more than 1.2 billion population will grow by 4.2 percent a year for the next twenty-five years, which is fastest among major world economies. In accordance with the vision of the Hon’ble Prime Minister, we need to move to responsible pricing which balances the interests of both the producers and consumers and towards transparent and flexible markets for both oil and gas for serving the energy needs of the country in an optimal manner. We need to put concerted efforts to meet the ambitious target of 10% import reduction of oil by the year 2022 set by the Hon’ble Prime Minister.”   – Dr. V. P. Joy, IAS (DG, DGH)

These words by the incumbent DG clearly reflect the larger vision of the Indian oil and gas industry. The Indian economy is booming and the country is looking forward to achieve a higher degree of self-reliance with respect to oil and gas. This comes against the backdrop of uncertainty in the global energy landscape owing to geopolitical conflicts, volatile oil prices, US sanctions on Iran, production cuts by OPEC and so on.

Let’s look at the roles and responsibilities of the DGH and how it is playing a crucial role in the Indian oil and gas industry:

• On behalf of the Ministry of Petroleum & Natural Gas of India, the DGH implements the NELP and CBM policy.
• DGH advises the MoPNG on exploration strategies and policies for production.
• On issues relevant to the exploration and optimal exploitation of hydrocarbons in the country, the DGH provides technical advice to the MoPNG.
• The DGH timely reviews the exploration programs of firms operating under Petroleum Exploration Licenses granted under the Oilfields (Regulation and Development) Act, 1948 and the Petroleum and Natural Gas Rules, 1959 with the objective to advise the Indian government on the role and relevance of these programs.
• The hydrocarbon reserves discovered and estimated by the operating companies are further evaluated by the DGH.
• The DGH advises the government on the offering of acreages for exploration to companies as well as matters relating to relinquishment of acreage by companies.
• The development plans for commercial discoveries of hydrocarbon reserves proposed by the operating companies are reviewed by the DGH and then he advises the government on the adequacy of such plans and the exploitation rates proposed and matters relating thereto.
• The DGH reviews and audits concurrently the management of petroleum reservoirs by operating companies and advises on any correction required to ensure sound reservoir management practices.
• The DGH regulates the preservation, upkeep, and storage of data and samples pertaining to petroleum exploration, drilling, production of reservoirs etc. and brings about the preparation of data packages for acreage on offer to the companies.
• In all the contract management functions, the government is assisted by the government.
• To explore and develop unconventional hydrocarbon resources is also the responsibility of the DGH.
• The ‘Essentiality Certificate’ is issued by the DGH for importing goods and services used in the E&P sector for availing custom duty concessions.

Moreover, with such a massive scale of operations of the E&P sector, arrived the need to establish a national level system that could assimilate, preserve and upkeep the vast amount of data. Further, a platform where the data could be organized and regulated for future use in exploration and development, besides use by R&D and other educational institutes. With this objective, the government established the National Data Repository (NDR) in the year 2017. In line with the Indian government’s Digital India program, the NDR aims to create a state-of-the-art E&P data bank. After having established the NDR, the DGH is now responsible for the smooth functioning of the NDR.

An industry that is as dynamic and ever-evolving as the oil and gas industry needs the right direction so that, the best results can be achieved through the available resources. The office of DGH has been rightly created to make an impact in the Indian oil and gas industry and let it lead in the international energy arena.

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