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The Ministry of Petroleum & Natural Gas (MoPNG) has again extended the last date for submitting bids for the 10 oil and gas blocks under the eighth round of the Open Acreage Licensing Programme (OLAP) for International Competitive Bidding (ICB).
The last date for submitting bids for the 10 blocks, spread over nine sedimentary basins covering an area of 36,316.5 sq km, is now March 30 this year, the Directorate-General of Hydrocarbons (DGH) said in a notification.
The original bid submission deadline was September 6, 2022, which was rescheduled to December 30, then further extended to January 31, 2023 and now to March 30.
The government has so far awarded 134 blocks in the first seven rounds under OLAP.
OLAP VIII round
In July 2022, the DGH floated a notice inviting offers (NIO) for exploration and development of oil and gas blocks for the eighth round of OLAP under the Hydrocarbon Exploration & Licensing Policy (HELP).
The 10 blocks include two on-land blocks, four shallow water blocks, two deep water blocks and two ultra-deep water blocks. This round is expected to generate an immediate exploration work commitment of$600-700 million.
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The exercise is part of the government’s plans to reduce dependence on imports. India, which consumes roughly 5 million barrels of crude oil per day, imports around 85 per cent of its crude oil and 50 per cent of its natural gas requirement.
The MoPNG is also trying to incentivise offshore exploration through a graded system of reduced royalty rates.
To incentivise early commercial production, concessional royalty rates will be applicable if production commences within four years for onland and shallow water blocks, and five years for deep water and ultra deep water blocks from the effective date of contract.
To incentivise domestic oil and natural gas output, the government in June 2022 allowed Exploration and Production (E&P) companies the freedom to sell crude oil produced by them domestically to any company within India, including PSU refiners, with effect from October 1, 2022. Before this, the MoPNG used to take a call on how much crude oil is allocated to a producer.
Oil and gas reserves
As of April 2022, it is estimated that around 652 million tonnes (MT) of oil and 1,139 billion cubic meters (BCM) of natural gas is recoverable in the country. During the last five years, the average production of crude oil was 32.44 MT, while natural gas stood at 31.88 BCM. The average age of major oil and gas producing fields is 28 years.
The consumption of petroleum products and natural gas in the country during FY22 stood at 204.23 MT and 63.91 BCM, respectively. Domestic production accounted for 22.8 per cent of the total requirement of crude oil and gas in India.
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