Paving the way for the next wave of hydrocarbon explorations in the country, the government on Monday signed agreements with the winners of the 55 blocks offered under the Open Acreage Licensing Policy (OALP), a critical part of the Hydrocarbon Exploration Licensing Policy (HELP) launched in March 2016.  Vedanta Cairn has been awarded 41 blocks offered and Oil India has been awarded 9 blocks. ONGC has won 2 blocks. Bharat Petro Resources (BPCL arm), GAIL (India) and Hindustan Oil Exploration Company have won one block each.

Petroleum minister Dharmendra Pradhan said these blocks would see an investment of around Rs 5,900 crore during the exploration period and a total resource worth Rs 1.45 lakh crore is expected from these 55 blocks spread across 59,282 sq km. “The way India’s consumption is increasing, while it is difficult to stop fuel import, these fields will help reduce import dependence.”

India imports more than 80% of its fuel requirements and new fields – barring small blocks offered under the discovered and small field policy — for exploration have been offered for the first time after a gap of eight years. Prime Minister Narendra Modi has set a target to reduce the country’s import dependence for oil from around 80% now to 67% by 2022 and 50% by 2030.

The HELP’s hallmarks are single licence for exploration of all forms of hydrocarbons (including shale gas and coal-bed methane), a simple revenue-sharing model and marketing and pricing freedom for developers.

The first OALP round did not see any foreign oil giant bidding while domestic major Reliance Industries also opted out.Petroleum secretary MM Kutty said the government would soon launch the second round of OALP which will have 14 blocks on offer with a total area of 30,000 sq km. Of these, four blocks in the Mahanadi basin have been carved out by the Directorate General of Hydrocarbon.

Kutty said the government expects foreign bidders to participate in the second round.
ONGC had bid for 37 blocks under OALP-1 and OIL for 22 (both either individually or through a consortium) while Vedanta Cairn had put in bids for all the 55 areas on offer. As many as 110 bids were received in total – 92 bids were received for 46 on-land blocks and 18 bids came in for nine offshore blocks. Apart from the firms mentioned above, other bidders for the first round, either individually or through a consortium, included Selan Exploration Technology and
Sun Petro.

Talking to reporters, Vedanta Resources chairman Anil Agarwal said while the company is a little nervous, it is looking at the entire subcontinent including Bangladesh, Nepal, Sri Lanka and other neighbouring nations as its market. Vedanta alone will be spending up to Rs 4,000 crore to explore 41 blocks won by it.

Agarwal said by being aggressive on the Indian hydrocarbon sector, Vedanta wants to make a statement that policies in the country are conducive and foreign players should participate as well.  Under the HELP, blocks will be awarded to those companies that offer the highest share of revenue to the government.