India delays deadline for key licence bid round

The Indian government has pushed back bid submissions by almost a month for the fifth round of its open acreage licensing policy (OALP-5), which offers 11 oil and gas tracts to domestic and international players.

Indian upstream regulator Directorate General of Hydrocarbons (DGH) said in a social media post this week the bid closing date for the OALP-5 round had been extended until 16 April.

India launched the OALP-5 round in January and bids had been expected to be submitted later this month.

While the DGH did not elaborate on the reasons leading to the delay, an official from a leading private-sector oil and gas operator told Upstream that global concerns due to the coronavirus and a sharp decline in crude oil prices could have led to the delay.

The OALP-5 round launched by the government earlier this year had 11 blocks on offer, including eight onshore, two shallow-water blocks and one ultra-deepwater block across multiple categories.

The 11 tracts have been offered to domestic and international companies and the Indian government is hopeful that the blocks could together generate exploration commitments of up to $450 million.

The blocks together cover up to 19,800 square kilometres, which are spread across eight sedimentary basins.

The onshore blocks on offer are located in the Rajasthan, Cambay, Gujarat Kutch, Assam and Bengal-Purnea basins, while the two shallow-water blocks lie off the country’s western coast.

One ultra-deepwater block, CY-UDWHP-2019/1, has been offered in the Cauvery basin, off the country’s eastern coast.

India’s OALP auction rounds are based on its revamped Hydrocarbon Exploration & Licensing Policy, which was approved by the government in 2016, based on a revenue-sharing mechanism.

Four OALP bid rounds have been conducted by the government during the past three years.

However, the recent OALP-4 round met with a tepid response, with only eight bids offered by state-owned companies last year, while private-sector oil and gas players stayed away.

India’s state-controlled Oil & Natural Gas Corporation (ONGC) walked away with all seven onshore exploration blocks offered during OALP-4.

The Indian Petroleum Minister Dharmendra Pradhan said in January that the seven blocks awarded to ONGC will be “adding exploration acreage of 18,510 square kilometres spread over three sedimentary basins of India and have a resource potential of approximately 33 billion barrels of oil and oil equivalent gas.”

Pradhan added that investors in the 94 blocks have “committed to acquiring 29,270 line kilometres of 2D seismic and 43,272 square kilometres of 3D seismic, in addition to drilling 369 exploration wells,” which is likely to generate exploration investment of $2.35 billion over the next three to four years.

India has been offering oil and gas exploration blocks on a semi-annual cycle through the OALP rounds. However, the government last year increased the number of bid rounds to be carried out to up to three each year, reducing the cycle to every four months.

Expressions of interest are invited during each cycle, after which bids are invited by the Indian government based on the responses.