January 15, 2020
Since mid-2017, the govt has awarded 94 blocks of OALP, covering an exploratory area of over 100,000 square kilometers over 16 Indian Sedimentary Basins
Earlier, blocks were awarded basis the maximum possible quantity of oil and gas provided, now they are being awarded to those willing to undertake maximum exploration programmes
OALP-V is expected to generate an immediate exploration commitment of US$400-450 million and is a giant step towards improving the ease of doing business in the sector
India is the world’s third-largest energy consumer and holds an estimated oil and gas deposit of 28 trillion tonnes, of which 60 per cent is yet to be harnessed
On January 15, the Directorate General of Hydrocarbons (DGH), India, announced the opening of the fifth oil and gas block bid round, offering 11 areas for bidding on revamped fiscal terms, according to media reports citing an official statement.
Since mid-2017, the government has awarded 94 blocks under the Open Acreage Licensing Policy (OALP) as part of the Hydrocarbon Exploration & Licensing Policy (HELP) regime. These cover an exploratory area of over 100,000 square kilometers over 16 Indian Sedimentary Basins, the DGH said. Earlier, blocks were awarded to companies that offered the maximum possible quantity of oil and gas to the government. Since OALP-IV, blocks in little-explored Category-II and -III basins are being awarded to companies willing to undertake maximum possible exploration programmes.
Meanwhile, bidding for OALP-V will close on March 18, and it is expected to generate an immediate exploration commitment of US$400-450 million. The DGH said HELP, which adopts the revenue sharing contract model, is a giant step towards improving the ease of doing business in the Indian Exploration and Production (E&P) sector. Of the 94 blocks awarded in the first four rounds of OALP, Vedanta won the maximum at 51, Oil India Ltd has 21 blocks, while ONGC won another 17.
India is the world’s third-largest energy consumer and is likely to have one of the fastest-growing energy markets in the world in the coming years. The Government is aiming to cut India’s crude oil import by 10 per cent by 2022 by increasing domestic output. India holds an estimated oil and gas deposit of 28 trillion tonnes, of which 60 per cent is yet to be harnessed.
Foreign companies are sitting up and taking notice of this, with multiple large investments in the sector. For example, Total SA acquired 37.4 per cent stake in city gas distributor Adani Gas for around US$803 million in October 2019. In May 2019, Royal Dutch Shell announced the launch of its first Indian lubricant laboratory in Bengaluru. In December 2019, Indian Oil Corp’s leading INDMAX refining technology was selected by Naftna Industrija Srbije (NIS) of Serbia for the production of higher-value products. NIS is one of the largest oil and gas companies in Southeast Europe, with Russian conglomerate Gazprom Neft, as its major shareholder.