Houston : India on Tuesday announced an open acreage licensing policy for oil and gas exploration, allowing bidders to carve out areas where they want to drill as the energy- hungry country looks at greater foreign investment to boost output.
The world’s third-largest oil consumer will conduct auction of oil and gas blocks under the Open Acreage Licensing Policy (OALP) twice a year, with the first round being held in July this year, Oil Minister Dharmendra Pradhan said here at the influential CERAWeek conference.
OALP auction will be held under the overhauled exploration licensing policy allows pricing and marketing freedom to operators and shifts to a revenue sharing model. `The July auction will be India’s first major exploration licensing round since 2010, although it had recently awarded 31 small discovered fields mainly to state-owned and local firms under the liberalised Hydrocarbon Exploration Licensing Policy (HELP).
Showcasing HELP, which was approved by the Union Cabinet on March 10 last year, to global investors, Pradhan said the new policy is part of the strategy to make India a business and investor friendly destination and cut import dependence by 10 per cent by 2022. “In the new model, government will not micromanage, micro monitor with producers. Government will only share revenue. It will be an open and regular affair,” Pradhan told reporters on sidelines of the CERAWeek Conference here. India’s domestic crude oil production of 36.95 million tons in 2015-16 barely met 20 per cent of its oil needs. Natural gas output at 32.249 billion cubic metres meets less than half of its needs. OALP will be a departure from the current licensing policy of government identifying the oil and gas blocks and then putting them on auction. It gives an option to a company looking for exploring hydrocarbons to select the exploration areas on its own.