India starts fifth round of bidding of 11 oil, gas blocks

KOLKATA (miningweekly.com) – The Indian government on Wednesday started the fifth round of international competitive bidding, offering 11 oil and natural gas fields for exploration and development under new financial terms.

“In continuation of our aggressive acceleration of exploration and production activities and adhering to prescribed timelines, the government has now launched Round-V for international competitive bidding. In this round, an area of approximately 19 800 km² is on offer for bidding by the investor community,” the government said in a statement.

The bidding would close on March 18, 2020. The 11 blocks in the current round of bidding are spread across eight sedimentary basins and include eight onshore blocks in six Category 1 basins and one each in Category 2 and Category 3 basins, two shallow water blocks in Category 1 and Category 2 basins and one ultradeep water block in a Category 1 basin, according to the government statement.

The oil sector regulator, Directorate General for Hydrocarbons (DGH) said, “it is expected Round V will generate exploration work commitment of estimated $400-million to $450-million. An area of 136 800 km² has already been awarded in rounds I, II, III and IV and with the award of a further 19 800 km² in Round V, the total exploration acreage in India would increase to 236 600 km² under the Open Acreage Licensing Policy (OALP).”

“The bidding comes with attractive and liberal terms like reduced royalty, no cess on oil produced, marketing and pricing freedom, round the year bidding by investors for carving out blocks of their interest, single licence to cover both conventional and unconventional hydrocarbon resources, exploration permission during the entire contract period and easy, transparent and swift bidding and awarding process,” DGH said.

In Round IV of the previous bidding, seven oil and natural gas blocks had been put on offer with an area of 18 510 km² with State-run exploration and production major ONGC Limited bagging all seven of the blocks.

Round IV was the first competitive bidding under the revamped OALP regime put in effect in February 2019. In the new rules put into play, blocks in little- or unexplored Category 1 and Category 2 basins are now awarded to investors offering maximum exploration, unlike earlier when the blocks were awarded to companies offering maximum share of oil and gas to the government.