First auction for 55 exploration blocks under OALP attracts 110 bids

The maiden auction under the Open Acreage Licensing Programme (OALP) Round – I for oil and gas exploration successfully concluded on 2 May with a total of 110 bids submitted for 55 blocks on offer by the deadline of 1200 hours (IST) on 2 May 2018.

The new Hydrocarbon Exploration and Licensing Policy (HELP), the centre-piece of upstream oil and gas sector reform process in the country, is meant to steer India as a global E&P investment destination.
Investors had submitted expression of interest (EoI) for 55 blocks spread across the country for carrying out exploration and production activities. Since its approval in 2016, the petroleum ministry opened the National Data Depository and opened OALP process in June 2017.
The 55 blocks put on bid in January 2018, are spread across 10 sedimentary basins of India, including onland, shallow water (offshore), and deepwater areas, and covering around 60,000 sq km. Of these 19 are in the Assam-Arakan block, 2 on Mumbai Offshore, 11 in Cambay, nine in Rajasthan, five in the KG block, three in Cauvery delta, two in Kutch, two in Saurashtra and one each in Himalayan Foreland and Ganga basin.
Under the Open Area Licensing Policy, exploration and production contract is awarded on a revenue sharing basis. It also provides for unified licensing for both conventional and unconventional hydrocarbons.
Blocks will be carved out by investors based on data from National Data Repository (NDR).
The policy allows freedom for market pricing of products and free access to the market for the product.
The petroleum ministry and the directorate-general of hydrocarbons undertook interactive sessions and road-shows in India (Mumbai, Ahmedabad, Delhi, Hyderabad and Kolkata) and abroad (Houston, London / Aberdeen, Istanbul, Abu Dhabi) to disseminate the process and the benefits of OALP to the E&P investor community.
Further, digital marketing campaign was carried on several websites globally during the bidding period for attracting the attention of global fraternity. Round-the-clock support was provided by DGH facilitation desk and the bid platform service provider, to clarify any issues the prospective bidders faced.
Since inception of NELP in 2009, when bidding on a large started taking place, this is the highest number of bids.
This is also the first time after the success of Discovered Small Field (DSF) bid round- 2016, that bids were invited under the new Revenue Sharing Regime for the exploration blocks, where bidders quoted revenue share and their work programme commitments, with no need for audits for their expenses and with clearly defined timelines for exploration and development.
Hitherto 87 per cent of the mining lease area was controlled by state-run oil companies, but with the advent of HELP and DSF, new private players have shown considerable interest in Indian E & P sector thereby leading to further private investments in this sector. 
Also, this bid round sees a huge accretion of 60,000 sq km to the exploration area. This is about 60 per cent of the area under exploration at present.
Out of the total 110 e-bids received, 92 e-bids were received for inland blocks while 18 e-bids were for offshore blocks. As many as 9 companies (Individually or as member of the bidding consortium) have participated in the bid round.
The response to the OALP Bid Round has been overwhelming as compared to the last round of E&P auctions under the NELP regime in 2009-10, largely credited to the new policy reforms which have improved the ease of doing business by introducing a transparent regulatory framework. 
It is noteworthy that all the 55 blocks offered in OALP Bid Round – I have been bid and it is a 100 per cent success. Out of 55 blocks on offer 46 blocks are on onland 8 blocks are in shallow water and one block in deep water.
The technical bid documents (online and hard copies) were opened on 2 May 2018 at DGH’s Noida office in the presence of the bidders. The evaluation of the bids would be undertaken in a time-bound manner and decision on award would be taken by the Empowered Committee of Secretaries and Group of Ministers, after the commercial bids are opened.
These blocks contains huge prognosticated conventional hydrocarbon resources of the order of 230 billion barrels of O+OEG in the “Yet-to-Find” category in India.
The award of these blocks would lead to significant uptick in the E&P activities in India. In the long run, discoveries from these blocks would go towards enhancing domestic production and reduction of the import dependence of India. 
As OALP is a continuing process, success in this bid round is likely to spur many new investors for second and subsequent rounds.