Sponsored by

Govt again defers deadline for oil and gas exploration blocks bid under OALP by a month to 15 May

New Delhi: The government has again deferred the last date for bidding for oil and gas exploration blocks offered under the Open Acreage Licensing Policy (OALP) by over a month to 15 May.

Last date for OALP bid round II and III, which are running almost concurrently, was 10 April but has now been pushed back.

"Bid submission closing date for OALP Bid Round II & III stands extended up to 15 May, 2019," upstream regulator DGH said in a notice.

It did not give reasons for extending the deadline.

The government had in January offered 14 blocks in OALP-II bid round and a month later offered another 23 oil and gas blocks and coal-bed methane (CBM) blocks in third round.

Bids for the 14 blocks offered in OALP-II bid round, covering an area of 29,333 square kilometres, were to close on 12 March but the deadline was extended to 10 April, according to the Directorate General of Hydrocarbon (DGH).

10 April was also the bid deadline for the 23 oil and gas and CBM blocks offered in the third round, which was launched on February 10.

OALP-II bid round was delayed by six months and its launch came barely a month before the third round.

Officials said OALP-II and OALP-III will run concurrently.

Oil Minister Dharmendra Pradhan had at the time of launch of OALP-II bid round on 7 January stated that an investment of about Rs 40,000 crore is expected in the prospecting of oil and gas in blocks offered.

 Govt again defers deadline for oil and gas exploration blocks bid under OALP by a month to 15 May

Representational image. Reuters

In the first round of OALP last year, as much as Rs 60,000 crore was committed in the exploration of oil and gas in 55 blocks or areas.

In the third round, the government is expecting up to$700 million (about Rs 49,000 crore) of investment that it hopes will help raise domestic output and cut imports.

India had in July 2017 allowed companies to carve out blocks of their choice with a view to bringing about 2.8 million sq km of unexplored area in the country under exploration.

Under this policy, called open acreage licensing policy or OALP, companies are allowed to put in an expression of interest (EoI) for prospecting of oil and gas in any area that is presently not under any production or exploration licence. The EoIs can be put in at any time of the year but they are accumulated twice annually.

The blocks or areas that receive EoIs at the end of a cycle are put up for auction with the originator or the firm that originally selected the area getting a 5-mark advantage.

The two window of accumulating EoIs end on May 15 and November 15 every year. EoIs accumulated till May 15 are supposed to be put on auction by June 30 and those in the second window by 31 December.

The first OALP round was launched in 2017 and bids came in by May 2018. EoIs for second round closed on 15 May, 2018, and the blocks were supposed to be put for auction by June but the round was delayed for unknown reasons. OALP-II was finally launched on 7 January.

In the meanwhile, EoIs in the third window also closed on 15 November, 2018 with as many as 18 blocks and five CBM blocks, measuring 31,722 sq km, being sought for. OALP-III bid round was launched on 10 February with 10 April as the last date for bidding.

Officials said the 14 blocks in OALP-II are estimated to hold in-place resource of 12,609 million tonne oil and oil equivalent gas.

In OALP-1, mining mogul Anil Agarwal-led Vedanta walked away with 41 out of 55 blocks bid out. State-owned Oil India won nine blocks while Oil and Natural Gas Corp (ONGC) managed to win just two.

The 55 blocks have a total area of 59,282 sq km. This compares to about 1,02,000 sq km being under exploration prior to OALP.

Blocks are awarded to the company which offers the highest share of oil and gas to the government as well as commits to doing maximum exploration work by way of shooting 2D and 3D seismic survey and drilling exploration wells.

Increased exploration will lead to more oil and gas production, helping the world's third largest oil importer to cut import dependence.

Prime Minister Narendra Modi has set a target of cutting oil import bill by 10 percent to 67 percent by 2022 and to half by 2030. Import dependence has increased since 2015 when Modi had set the target. India imports 83 per cent of its oil needs.

The new policy replaced the old system of government carving out areas and bidding them out. It guarantees marketing and pricing freedom and moves away from production sharing model of previous rounds to a revenue-sharing model, where companies offering the maximum share of oil and gas to the government are awarded the block.

Your guide to the latest election news, analysis, commentary, live updates and schedule for Lok Sabha Elections 2019 on firstpost.com/elections. Follow us on Twitter and Instagram or like our Facebook page for updates from all 543 constituencies for the upcoming general elections.

Updated Date: Apr 09, 2019 07:38:57 IST

Also See