KOLKATA (miningweekly.com) –  India will next year start offering ‘on-tap’ licensing for unexplored oil and gas field across the country through a continuous auctioning process under an open acreage policy.

Despite facing challenges in attracting investments for greenfield projects in a depressed oil and gas pricing environment, India’s Oil and Natural Gas Ministry has decided that all unexplored oil and gas fields will be put under the hammer in an ongoing auction under the open acreage policy approved by the government, earlier this year.

A government official said that, according to preliminary plans drawn up by the Ministry, an estimated aggregate of up to 3.5-million km^₂ of potential oil and gas fields could be put up for auction in one go in 2017.

The government’s thinking is that such a large sedimentary basin on offer would give any prospective domestic or foreign exploration and production (E&P) companies freedom of choice regarding potential areas of investments, which so far has not been the case.

The on-tap auction under open acreage policy will be conducted on a digital platform currently under development.

Bids received from prospective investors, for one or more fields, would automatically trigger the digital auction platform to invite counter-bids for the very same field or fields, the government official said.

While the counter bidding would be open for a specified period of time, it was not yet decided what the course of action would be for the government in the case that counter bids were not received and there was just a sole bid during that specified time.

Though not officially stated, the decision to open up all unexplored oil and gas fields at one go was possibly taken against the backdrop of a below expectation response from investors for the ongoing auction of small and marginal oil and gas fields, industry sources said.

As reported by Mining Weekly Online, the last date for submission of bids for 67 marginal oil and gas fields had been extended to October 31, 2016.

In the case of these marginal fields, several investors had complained that the 67 fields offered in clusters of 47 contracts were too small and prima facie not viable for global E&P majors. Government officials said that the open acreage policy and continuous auctioning would avoid the situation as investors would have the option to pick and choose one or several projects covering all unexplored fields in the country depending on the investment strategies and priorities of respective E&P companies.

A single licence secured through the auction route would enable any investor to simultaneously develop and produce all forms of hydrocarbon from a single field.