New Delhi: India plans to auction some oil exploration blocks by June and will allow bidders to carve out areas where they want to drill in order to attract greater interest, a government official told Reuters on Wednesday.
The move is part of a drive by New Delhi to quickly generate income from its oil and gas reserves.
India overhauled its exploration licensing last year with a shift to a revenue sharing model, while also allowing pricing and marketing freedom to the operators.
The planned auction will be India’s first major exploration licensing round since 2010, although the energy-starved nation recently awarded 31 small fields to mainly local firms.
The world’s third-biggest oil and gas consumer imports nearly three-quarters of its energy requirements, but Prime Minister Narendra Modi has set a target of cutting its fuel import dependency to two-thirds by 2022 and to half by 2030.
India will soon set up national data repository that would provide bidders preliminary data on exploration areas that will go under the hammer, the official told Reuters on condition of anonymity.
The South Asian nation’s previous licensing rounds saw a lukewarm response from global oil giants because of tax issues and doubts about the quality of the blocks on offer.
In the next licensing round, firms would study the data and delineate the area they want to bid for instead of depending on the government to prepare the exploration block.
The oil ministry has hired consultant Price Waterhouse Coopers (PWC) to advise on the process for the next licensing round, the source said.
PWC will provide details including the size of areas to be offered, the frequency of the bidding process and preparation of bid documents, he said, adding most of the exercise is over and auctions would be launched in a few months.
India produces around 727,000 barrels of oil per day (bpd), mostly from fields which were awarded decades ago. The country’s proven oil reserves amounted to 5.7 billion barrels in 2015, according to the BP Statistical Review.