Delays in bidding rounds notwithstanding, the government has increased the expression of interest (EoI) submission cycle for oil and gas acreage to three times a year from two times earlier, the Directorate General of Hydrocarbons (DGH) said.
India had in July 2017, allowed companies to carve out blocks of their choice with a view to bring 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 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 and were accumulated twice annually. But now, this cycle has been increased to three.
“In view of recent policy reforms and changes aligned to promote ‘Ease of Doing Business’, the EoI submission cycle is increased from two, to three times in a year,” the DGH said in a notification.
Previously, the two window of accumulating EoIs ended on May 15 and November 15 every year. EoIs accumulated till May 15 were supposed to be put on auction by June 30 and those in the second window by December 31. According to the revised EoI submission cycle; the first window for submission will be from April 1 to July 31, second from August 1 to November 30, and the third from December 1 to March 31 every year, DGH said. The overhauled oil and gas exploration licensing policy will be implemented from the 4th bid round.
The government has, under the first three rounds of OALP, awarded 87 oil and gas fields to private and public entities. The fifth window of EoI submission has started on May 16, 2019 and will end on November 30, 2019, DGH said.
Prime Minister Narendra Modi has set a target of cutting oil import bill by 10 per cent to 67 per cent by 2022 and to half by 2030. Import dependence has increased since 2015 when Modi had set the target. India currently 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.