New Delhi: India on Thursday put on auction a record exploration acreage for prospecting of oil and gas, from 55 blocks, in the first bid round in eight years.
Each block on offer has been carved out by prospective bidders under the open acreage licensing (OAL) of the new Hydrocarbon Exploration and Licensing Policy (HELP), oil minister Dharmendra Pradhan said launching the round.
Blocks would be awarded to the company which offers highest share of oil and gas to the government as well as commits to do maximum exploration work by way of shooting 2D and 3D seismic survey and drilling exploration wells.
“Last date of bidding is April 3," Pradhan said, adding that the blocks would be awarded by June/July.
Increased exploration would lead to more oil and gas production, helping the world’s third largest oil importer to cut import dependence.
Prime Minister Narendra Modi has set a target of cutting oil import bill by 10% to 67% by 2022 and to half by 2030.
India had in July last year allowed companies to carve out blocks of their choice with a view to bringing about 2.8 million square kilometres of unexplored area in the country under exploration.
Under this policy, companies are allowed to put in an expression of interest (EoI) for prospecting of oil and gas in any area that is presently not under any production or exploration licence. The EoIs can be put in at anytime of the year but their are accumulated twice annually.
The blocks or areas that receive EoIs at the end of the cycle are put up for auction with the originator or the firm that originally selected the area getting a 5-mark advantage.
The 55 blocks have a total area of 59,282 sq km. This compares to about 1,02,000 sq km being under exploration currently.
State-owned Oil and Natural Gas Corp (ONGC) and Cairn India — a unit of Vedanta Ltd, had put in 41 out of 57 bids received in November last year. Private player Hindustan Oil Exploration Co (HOEC) bid for one area in a round.
Of the 57 EOIs put only 55 blocks were cleared for bidding after eliminating areas that are under no-go zone or overlapping with existing mining lease. He said the opening up of 2.8 million sq km of sedimentary basins for oil and gas exploration will help raise domestic production and cut excessive dependence on imports.
The new policy replaced the old system of government carving out areas and bidding them out. It guarantees marketing and pricing freedom and moves away from production sharing model of previous rounds to a revenue sharing model where companies offering maximum share of oil and gas to government are awarded the block.
Till now, the government has been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round. So far 256 blocks had been offered for exploration and production since 2000. The last bid round happened in 2010. Of these, 254 blocks were awarded