EoIs for only 13 areas under second oil acreage auction

The second round of oil and gas auctions under the Open Acreage Licensing Policy (OALP-II) has got expressions of interest (EoIs) for only 13 geographical areas as against 55 during the first round that happened last year.

According to sources, staterun Oil and Natural Gas Corporation (ONGC) has submitted interests for seven of these areas. Rest of the companies include Mukesh Ambaniled Reliance Industries (RIL) and Bharat PetroResources (BPRL). RIL had stayed away during the bids for OALP1 and Discovered Small Fields (DSF-1).

The bidding round for OALP-II is expected to begin in July. The last date for submission of EoIs was May 15.

The OALP is designed to allow companies to carve out their own exploration areas while plugging the gaps found in the earlier model. In the EoI stage, companies can carve out their area based on the national data repository (NDR). The second stage involves bidding where others can also join.

“We have received around 13 EoIs, but expect a lot of overseas interest this time. The bidding stage is likely to start by mid-July,” said a government official.

During OALP-I, Anil Agarwal’s Vedanta Cairn grabbed the maximum number of blocks, around 40 of 55 that were on offer. India’s largest hydrocarbon producer Oil and Natural Gas Corporation (ONGC) bagged lesser number of blocks as compared to Oil India (OIL). Interestingly, none of the foreign players participated in this round.

“Since OALP is a continuous process, companies will have the option to go for blocks through the year. Getting 13 EoIs, soon after the success of first round shows that exploration sector still has takers. The EoI stage for the third round of OALP kicked off on May 16 and will extend up to November 15 this year,” the official said.

Another official indicated that the hydrocarbon regulator is set to change a clause in the bid document which states that before undergoing any structural change a holding company with participating interest in a block must take permission from the government to do so. The move is to attract more foreign investors during the bidding stage of OALP-II.

The government expects more interest in the hydrocarbon sector as India’s share of global demand is expected to grow from present 5.5 per cent to 9 per cent by 2035.

The government also aims at meeting a share of the increasing demand through domestic production and targets to reduce imports by 10 per cent by 2022. At present, India is the third largest consumer of oil and petroleum products, after the US and China. According to the data available with the Directorate General of Hydrocarbons (DGH), the data repository has so far got 277 users, including 85 Indian and 43 foreign firms. Companies will get access to 1.76 million Line Kilometre (LKM) of 2D seismic data and 0.65 million square kilometres of 3D seismic data.