India on Sunday launched the third bidding round under its open acreage licensing policy (OALP), putting on the block 23 oil and blocks covering an area of 32,000 square kilometers, including 5 for extraction of coal bed methane.
With this, the total exploration acreage in the country is expected to more than triple to 300,000 square kilometres in two years ending 2019, a petroleum ministry release stated.
Union minister of petroleum and natural gas and skill development and entrepreneurship Dharmendra Pradhan launched the bid round-III under Open Acreages Licensing Policy (OALP) at Greater Noida, the venue of PETROTECH-2019.
OLAP Round-III follows the contract signing of 55 blocks under OALP bid round-I, and the launch of Bid Round-II on 7 January 2019 offering 14 blocks under petroleum operation contract for international competitive bidding.
With the launch of the third bidding round, more than 1,20,000 sq km of area has now been made available for exploration in last one year. The OALP adopts all features of HELP - reduced royalty rates, no oil cess, uniform licensing system, marketing and pricing freedom, revenue sharing model, exploration rights on all retained area for full contract life etc.
The third round of bidding is expected to generate up to $700 million, the government said.
Prime Minister Narendra Modi has set a target to cut India’s dependence on foreign oil to 67 per cent by 2022.
Under the target, India wants to quickly monetise its hydrocarbon reserves and bring in foreign participation to explore and produce from them.
The government is also looking to expedite discovery efforts to establish the country’s shale oil and gas potential and has asked companies to submit a plan, two industry sources said on Sunday.
In late 2013, India gave rights to Oil and Natural Gas Corp Ltd to explore for shale oil and gas reserves. However, after years of exploratory reserves, it has failed to find significant resources.
In January, India’s oil and gas regulator Directorate General of Hydrocarbons (DGH) held a meeting with representatives from various private and government companies to urge them to pursue shale resources in the oil and gas blocks already held by them, a source at the regulator said.
Gas-starved India currently imports almost half of its annual natural gas consumption. Prime Minister Narendra Modi wants India to be a gas-based economy and increase the share of gas in the country’s energy mix to 15 per cent by 2030 from 6.5 per cent now.
Currently CBM gas is produced by three companies in India - Mukesh Ambani-owned Reliance Industries Ltd, Ruia brothers-owned Essar Oil & Gas Exploration and Production Ltd and Great Eastern Energy Corp Ltd.