India is going to become a $5 trillion economy
Ministry of Petroleum and Natural Gas today signed contracts for 32 blocks awarded under Open Acreage Licensing Programme (OALP) Bid Rounds – II & III. The Government had launched OALP Bid Rounds-II and III on 07th January, 2019 and 10th February, 2019 respectively. While Bid Round–II offered 14 Blocks (covering total area of approx. 30,000 sq. km.), the Bid Round-III offered 23 blocks including 5 CBM blocks (covering total area of approx. 32,000 sp.km.) under International Competitive Bidding (ICB) process. The bidding for both these rounds closed on 15th May, 2019. Subsequent to evaluation, a total of 32 blocks were approved for award to 6 companies, for which the Revenue Sharing Contracts have been signed today, in the presence of the Minister of Petroleum and Natural Gas and Steel Shri Dharmendra Pradhan. The total area awarded today in the 32 blocks is 58,998 sq.km. (Onland- 31,551 sq.km; Offshore- 27,447 sq.km.).
Speaking on the occasion, Shri Pradhan said increasing production of crude oil and gas is the priority of the government. He said that the country already has a network of refineries and a robust marketing setup, and E&P sector is expected to come up in a big way. “Today’s award of OALP contracts is a step in this direction”, Shri Pradhan added. He said that India is going to become a $5 trillion economy and energy security, availability and accessibility are essential for this. India is going to surpass China in energy consumption in a few years. He said the last five years have been a journey of continuous policy reforms and bold decisions, as the Country moved from production sharing to revenue sharing and now reached Maximum Work commitment programme in the E&P sector- all these are intended to increase production. He assured the successful bidders of OALP rounds that all issues can be solved through discussions and consultations, and they should not delay the projects at all.
The first OALP Bid Round was launched by the Government in January 2018, and had received overwhelming success with 110 bids for 55 blocks covering 59,282 sq. km. area. All the 55 blocks were awarded in October, 2018 and the Operators of these blocks have since initiated petroleum exploration activities or are in final stages of obtaining Petroleum Exploration Licenses (PELs). The first oil/gas from these blocks is expected before year 2023.
The Hydrocarbon Exploration & Licensing Policy (HELP), which has adopted 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. It comes with attractive and liberal terms like reduced royalty rates, no oil cess, marketing and pricing freedom, round the year bidding, freedom to investors for carving out blocks of their interest, a single license to cover both conventional and unconventional hydrocarbon resources, exploration permission during the entire contract period, and an easy, transparent and swift bidding and awarding process.
With the successful roll out of the HELP/OALP regime, based on the world-class National Data Repository (NDR), the Government has achieved a massive enhancement of exploration acreage in India. The acreage which stood at approximately 90,000 sq. km. in 2017 has now been enhanced to 2,10,000 sq. km. with today’s award, after 3 rounds of OALP. The country’s exploration acreage is expected to reach 300,000 sq. km. by the end of the year 2019 with further two rounds of bidding. The 4th cycle of submitting Expressions of Interest (EoIs) closed on May 15, 2019 and currently the 5th cycle of EoI is open till November 15, 2019.