Only 3 bidders for 21 oil and gas blocks; Vedanta, Reliance stay away, Energy News, ET EnergyWorld
No less than 21 blocks or zones have been proposed for the exploration and production of oil and gas under the Open Acreage Licensing Policy (OALP) Bid Round VI, for which the call for tenders was issued. closed on October 6.
Besides ONGC and OIL, Sun Petrochemicals was the only other company to bid, according to the “Summary of Bids Received Against Proposed Blocks” published by the Directorate General of Hydrocarbons (DGH).
Of the 21 blocks offered, 18 obtained a single bid and the remaining 3 blocks had two bidders.
ONGC, India’s largest oil producer, has bid for 19 of the 21 blocks offered while OIL has offered two. ONGC was the only bidder in 16 blocks and OIL was the only bidder in the two areas he was looking for.
Sun Petrochemicals offers three blocks, where it competes with ONGC. Vedanta Ltd and Reliance-BP combine, which had bid in previous OALP rounds, did not bid in the current round.
The government hopes that opening up more acreage to exploration will help boost India’s oil and gas production, helping lower the $ 90 billion oil import bill.
In 2016, he introduced an open acreage policy that moved away from the previous practice of government identifying and proposing blocks to a policy where explorers were free to identify any areas outside of those that are already with one company or another, for example. oil and gas exploration.
Identified areas are to be clubbed twice a year and auctioned. The company that identifies the area gets a 5 point advantage.
But with the exception of the first round, private sector participation was limited. Mining mogul Anil Agarwal’s Vedanta Ltd walked away with 41 out of 55 blocks offered in the very first round and secured another 10 areas in the next two rounds.
Other cycles have been dominated by state-owned enterprises.
India is 85 percent dependent on imports to meet its oil needs and finding new reserves through rounds of exploration is key to reducing this dependence.
In the five previous OALP tenders, 105 blocks for oil and gas exploration were offered. Of these, Vedanta Ltd came away with 51. OIL won 25 and ONGC 24 others.
The joint venture of Reliance Industries and BP was awarded a block. Indian Oil Corporation (IOC), GAIL, BRPL and HOEC also got one block each.
The 105 blocks covering an area of ​​approximately 156,580 square kilometers in more than 17 sedimentary basins in India attracted a total committed investment of approximately $ 2.378 billion in the exploration phase.
The 21 OALP-VI blocks are spread over 11 sedimentary basins, 9 states covering 35,346 km² in area. Of these, 15 blocks are terrestrial, 4 in shallow water and two in ultra-deep water.
When OALP-VI launched in August, the government said it expected a commitment of $ 300-400 million to invest in oil and gas exploration throughout the cycle.
Under the OALP, Category I basin blocks are awarded to a company providing the largest share of the oil and gas revenues produced. Those of categories II and III are offered to those who offer a maximum commitment in terms of exploration or investment.
Category I basins have established reserves and fields that are already producing, while Category II basins are those with contingent resources awaiting commercial production. Category III basins are those with potential resources awaiting discovery.
In OALP-VI, 12 blocks are in Category-I ponds while 4 are in Category-II and the remaining 5 are in Category-III.
Features of the OALP cycle include reduced royalty rates, no petroleum tax, a uniform licensing system, freedom of marketing and pricing, and a revenue sharing model, according to DGH.
Exploration rights are offered to all areas retained for the duration of the contract, he said, adding that concessional royalty rates apply in the event of early commercial production.
There is no revenue sharing in the blocks falling under the categories II and III basins, except in the event of exceptional gains. PTI ANZ ANZ ANU ANU