Last date of bidding for 55 oil and gas blocks extended2 min read . Updated: 22 Mar 2018, 02:43 PM IST
The government extends by a month the last date of bidding for a record number of oil and gas blocks to 2 May from previously 3 April
New Delhi: The government on Thursday pushed back by a month the last date of bidding for a record number of oil and gas blocks to 2 May. Bidding in the auction of 55 exploration blocks on offer for prospecting of oil and as under the open acreage licensing policy (OALP) was to originally close on 3 April.
“Attention!! Bid submission date for OALP Bid Round-I is extended till 2nd May, 2018," the Directorate General of Hydrocarbon (DGH) tweeted. It did not give any reasons for the extension.
DGH, the upstream technical arm of the ministry of petroleum and natural gas, is currently holding road-shows to attract investors for OALP bid round being held under the new hydrocarbon exploration and licensing policy (HELP).
India had in July last year allowed companies to carve out blocks of their choice with a view to bringing about 2.8 million sq km 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.
As many as 55 blocks were sought for prospecting of oil and gas by prospective bidders, mostly by state-owned explorers Oil and Natural Gas Corp. Ltd (ONGC) and Oil India Ltd (OIL) and private sector Cairn India Ltd by the end of the first EoI cycle on 15 November 2017, officials said.
The blocks or areas that receive EoIs at the end of a 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, they said.
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. 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. Import dependence has increased since 2015 when Modi had set the target. India currently imports 80% of its oil needs.
Officials said 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.
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. But as many as 156 have already been relinquished due to poor prospectivity.