1 June, 2016
The Ministry of Petroleum and Natural Gas has approved the GIPIP 2016 for the reference and guidance of all exploration and production operators in India. The Production Sharing Contract prescribes adoption of GIPIP in carrying out petroleum operations efficiently, safely, prudently and in an environmentally sustainable manner. However, until now, there was no codified set of GIPIP standards though safety regulations and standards have been formulated by Oil Industry Safety Directorate. Issues related to codification of GIPIP have also been examined by the Comptroller and Auditor General (“CAG”) during the audit of a block when the CAG stated that the GIPIP is not a clear, unambiguous and self evident “gold standard”, but “reasonable judgment” exercised by operators. The Rangarajan Committee in its report on the “Production Sharing Contract Mechanism in the Petroleum Industry” had also recommended the codification of GIPIP. The approved GIPIP provides guidelines to be followed in the following crucial areas: exploration, discovery, appraisal, declaration of commerciality, field development, production, testing and analysis – reservoir and production, health, safety and environment (HSE)/abandonment and procurement procedures.
For further information, please contact:
Seema Jhingan, Partner, Lex Counsel Law Offices
sjhingan@lexcounsel.in
