The Central government on Thursday announced a series of changes to its policy on oil and gas exploration in the country, seeking to do away with red-tape and complicated licences and boost transparency in the industry. According to The Times of India, this could unlock fuel reserves worth $36.6 billion (Rs 2.33 lakh crore), create more jobs and make it easier to do business.

Finance Minister Arun Jaitley had announced that the government was planning some of these measures, while presenting the Union Budget two weeks ago. The government believes these changes are “global models” that will encourage foreign companies to enter the Indian market. Minister of State for Petroleum and Natural Gas Dharmendra Pradan said, “I believe the world will follow us and investors will be back.” Here are some of the key changes:

Single licence to replace multiple ones

One of the biggest measures under the new policy is the government’s decision to give out a single licence for oil, gas and coal-bed methane exploration in the country, a police they have called Hydrocarbon Exploration and Licensing Policy. The older New Exploration Licensing Policy forced companies to get different licences for each resource. The NELP was set up by the National Democratic Alliance under the Atal Bihar Vajpayee government two decades ago and has been widely criticised.

Pricing of gas and discovery of new blocks

The government has also decided to offer companies the right to freely price gas from new blocks and existing blocks that are yet to start production. However, to protect consumers, the government will recommend a cap for these prices. Free pricing has long been an industry demand. Companies will also have the chance to tell the government they are interested in exploring an area for hydrocarbon reserves, and the government will then declare it a block and put it up for auction. Earlier, the government would come up with the blocks first.

Revenue-sharing model

The policy replaces the old profit-sharing model with a revenue-sharing model. Earlier, contractors would have to share their profits with the government after recovering their costs, which would lead to many legal disputes. The revenue-sharing model will mean the government cannot nitpick and micromanage the contractor’s profit calculation processes.