Govt receives 13 bids for oil & gas blocks in latest licensing round
OIL & GAS

Govt receives 13 bids for oil & gas blocks in latest licensing round

According to a notification by the Directorate General of Hydrocarbons (DGH), the government has received a total of 13 bids for 10 oil and gas blocks in the latest exploration licensing round. This includes three bids from the private sector. The bidding process, overseen by the DGH, had a submission deadline that was extended multiple times over the course of a year.

Among the bidders, the state-run Oil and Natural Gas Corp (ONGC) has placed bids for nine blocks. Other companies such as Oil India, Vedanta, Sun Petrochemicals, and the joint venture of Reliance Industries and BP have each bid for one block. Out of the 10 blocks, seven have received only one bid, while the remaining three have received two bids each.

While ONGC is expected to secure six blocks without competition, it will face competition from Vedanta, Sun Petrochemicals, and Oil India for one block each. The joint venture between Reliance Industries and BP faces no competition for the block it has bid for in the KG Basin.

This exploration licensing round, known as the eighth under the Open Acreage Licensing Policy (OALP), was launched on July 7 last year. The bid acceptance for this round concluded on July 5 this year after several deadline extensions.

Since the launch of OALP five years ago, state-run companies have dominated all the bidding rounds, except the first one where Vedanta won most of the blocks on offer. Foreign major companies have shown little interest in participating in Indian exploration licensing rounds.

India's domestic crude oil production has experienced a 22 per cent decline over the past decade, coupled with increasing local consumption. As a result, India's reliance on foreign oil has reached 88 per cent of its domestic needs. To address this, India needs to intensify exploration efforts and slow down the decline in production from its aging oil fields.

ExxonMobil, which has expressed interest in India's upstream sector, has called for investor-friendly policies that provide protection against expropriation and ensure certainty of returns on investment. The imposition of a windfall tax on domestic crude production last year has also dampened investor sentiment, according to industry executives.

In the latest exploration licensing round, the bid submission deadline was extended several times to accommodate potential bidders. The government aimed to provide investors with more time to evaluate the opportunities and place their bids. Additionally, the government introduced modifications to the bidding documents for this round, allowing companies to carve out larger blocks, adjusting bid evaluation criteria, and incentivising early monetisation of discoveries.

According to a notification by the Directorate General of Hydrocarbons (DGH), the government has received a total of 13 bids for 10 oil and gas blocks in the latest exploration licensing round. This includes three bids from the private sector. The bidding process, overseen by the DGH, had a submission deadline that was extended multiple times over the course of a year.Among the bidders, the state-run Oil and Natural Gas Corp (ONGC) has placed bids for nine blocks. Other companies such as Oil India, Vedanta, Sun Petrochemicals, and the joint venture of Reliance Industries and BP have each bid for one block. Out of the 10 blocks, seven have received only one bid, while the remaining three have received two bids each.While ONGC is expected to secure six blocks without competition, it will face competition from Vedanta, Sun Petrochemicals, and Oil India for one block each. The joint venture between Reliance Industries and BP faces no competition for the block it has bid for in the KG Basin.This exploration licensing round, known as the eighth under the Open Acreage Licensing Policy (OALP), was launched on July 7 last year. The bid acceptance for this round concluded on July 5 this year after several deadline extensions.Since the launch of OALP five years ago, state-run companies have dominated all the bidding rounds, except the first one where Vedanta won most of the blocks on offer. Foreign major companies have shown little interest in participating in Indian exploration licensing rounds.India's domestic crude oil production has experienced a 22 per cent decline over the past decade, coupled with increasing local consumption. As a result, India's reliance on foreign oil has reached 88 per cent of its domestic needs. To address this, India needs to intensify exploration efforts and slow down the decline in production from its aging oil fields.ExxonMobil, which has expressed interest in India's upstream sector, has called for investor-friendly policies that provide protection against expropriation and ensure certainty of returns on investment. The imposition of a windfall tax on domestic crude production last year has also dampened investor sentiment, according to industry executives.In the latest exploration licensing round, the bid submission deadline was extended several times to accommodate potential bidders. The government aimed to provide investors with more time to evaluate the opportunities and place their bids. Additionally, the government introduced modifications to the bidding documents for this round, allowing companies to carve out larger blocks, adjusting bid evaluation criteria, and incentivising early monetisation of discoveries.

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