ONGC bids for 37 oil blocks, Cairn 55 in 1st OALP round

New Delhi: State-owned ONGC today bid for 37 oil and gas blocks while Cairn India put in bids for all the 55 areas on offer in India's maiden auction of oil and gas acreage under the newly formulated open acreage licensing policy.

As many as 110 bids had been received, the Directorate General of Hydrocarbon (DGH) tweeted.

Bidding in the auction of 55 exploration blocks on offer for prospecting of oil and gas as under the open acreage licensing policy (OALP) closed today.

Oil and Natural Gas Corp bid for 26 blocks on its own and another 11 with partners. Cairn India, which is now known as Vedanta Ltd, bid for all the 55 blocks, sources privy to the development said.

Cairn put in very aggressive bids for 13 blocks and a little less so for another 9. The remaining bids were mostly routine, they said.

State-owned Oil India Ltd (OIL) is the other major bidder in the round that also saw participation of other PSU oil firms like Indian Oil Corp (IOC), GAIL and Bharat Petroleum Corp Ltd (BPCL) mostly as consortium partners.

DGH, the upstream technical arm of the ministry of petroleum and natural gas, began opening of offers received under the OALP bid round being held under the new Hydrocarbon Exploration and Licensing Policy (HELP).

India had in July last year 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, 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 anytime of the year but their are accumulated twice annually.

As many as 55 blocks were sought for prospecting of oil and gas by prospective bidders, mostly by state-owned explorers Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) and private sector Cairn India by the end of the first EoI cycle on November 15, 2017, they said.

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 55 blocks have a total area of 59,282 sq km. This compares to about 1,02,000 sq km being under exploration currently, they said.

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

Increased exploration would 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 currently imports 81 percent of its oil needs.

Sources said ONGC and Cairn India had put in 41 out of 57 bids received in November last year. Private player Hindustan Oil Exploration Co (HOEC) bid for one area in a round.

Of the 57 EOIs put only 55 blocks were cleared for bidding after eliminating areas that are under no-go zone or overlapping with existing mining lease.

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 maximum share of oil and gas to government are awarded the block.

Till now, the government has been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round.

So far 256 blocks had been offered for exploration and production since 2000. The last bid round happened in 2010. Of these, 254 blocks were awarded. But as many as 156 have already been relinquished due to poor prospectivity.