OPINION: Nations around the world are looking to get licensing rounds back on track, not least after some were delayed due to the coronavirus pandemic and resulting commodity price crash.
However, despite the recent upward trend in oil prices, governments are realising they have to do more to attract exploration dollars amid the backdrop of the energy transition.
Colombia last week launched a licensing round featuring new incentives intended to encourage drilling and stimulate investment in the Latin American nation's oil and gas sector.
President of Colombia’s hydrocarbons regulator ANH, Armando Zamora, said the revamped terms and conditions are designed to provide a vehicle to continue attracting investment in fossil fuels amid the global transition.
One of the innovative features of this bid round is the introduction of flexible signature bonuses with a strong incentive for drilling.
Petronas too has improved the fiscal terms for the Malaysia Bid Round 2021, which comprises 13 offshore exploration blocks and three technical study areas.
The Enhanced Profitability Term will be applied to shallow-water blocks in the MBR 2021 and subsequent rounds while the Deepwater Revenue over Cost — an improved version of the 2018 Deepwater PSC — will apply to the deep-water tracts.
Meanwhile, India’s Ministry of Petroleum & Natural Gas on Tuesday unveiled its draft Oilfields (Regulation & Development) Amendment Bill, 2021 — inviting comments and suggestions on the proposed revision.
These amendments are said to “seek to promote the ease of doing business”, and create opportunities for the exploration, development and production of next-generation cleaner fuels and mitigate regulatory challenges and risks.
Securing exploration investment might prove more challenging in future but at least some governments are pulling out whatever stops they can to remain attractive to upstream players.
(This is an Upstream opinion article.)