Government tightens the noose
“A failure of the contractor to notify the Directorate General of Hydrocarbons (DGH) about any extension in the reservoir of the discovery area outside its contract area as required under Article 10.9, shall be considered a non-compliance or contravention of the provisions of this contract,” the amended rule said. The failure to inform DGH could result in the termination of a contract. “The contractor is limited by petroleum that is available in its clearly defined and demarcated development area. “Notwithstanding anything contained in this contract, the contractor shall have no right to carry out petroleum operations with respect to a reservoir extending outside contract area, without seeking the prior explicit written permission of the government,” the amendment further said.
The amendment has also allotted for the joint development of two fields with connected reservoirs. In case a contractor discovers that their reservoir has been extended beyond its field after submitting the field development plan, they would have to inform the DGH within 15 days of receiving this information, the new rules state.