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Business|Exploration|Gas|Hydrocarbons|Oil And Gas|Oil-and-gas
business|exploration|gas|hydrocarbons|oil-and-gas|oilandgas

India increases number of windows for accepting EoIs for oil, gas exploration

19th August 2019

By: Ajoy K Das

Creamer Media Correspondent

     

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KOLKATA (miningweekly.com) – In a bid to improve the ease of doing business and to woo foreign investors, the Indian government has decided to open three oil and gas bid windows every year, instead of two, under the Open Acreage Licensing Policy (OALP).

“In view of recent policy reforms and changes aligned to promote the ease of doing business, the expression of interest (EoI) submission cycle is increased from two to three times a year,” a notification issued by Directorate General of Hydrocarbons (DGH) states.

Under the newly unveiled OALP, any domestic or foreign oil and natural gas exploration and production company can carve out blocks currently not under production and exploration and submit EoIs seeking licences to invest in these assets.

According to the DGH, under the revised and liberalised norms, the first window for submission for EoIs will be from April 1 to July 31, the second from August 1 to November 30, and the third from December 1 to March 31 of the following year.

Until now, EoIs have accumulated during two windows, one ending May 15 and the other ending November 15 every year.

It might be noted that the second round of block auctions, which was slated for June 2018, had been cancelled and although no official reasons were cited, industry insiders feel that this is largely owing to the tepid response from investors.

Subsequently, the government opened fresh auctions earlier this year, combining blocks of the second and third rounds. While the dates for the fourth round of auction are slated to be announced soon, government says EoIs have already been received for this tranche of blocks.

Despite the fourth round auction being on hold, the government announced a fifth round of auction for which submission of EoIs started in May 2019 and will remain open until November 2019.

The latest round of auction of oil and gas blocks is significant, as it comes soon after government junked awarding contracts based on revenue sharing arrangements, with winning bids henceforth being decided based on exploration commitments of bidders. At the same time, winning bidders would enjoy full production and pricing freedom for assets secured under the OALP.

Prior to the OALP, government used to carve out blocks and put them up for bidding and between 2000 and 2010, 256 blocks were allocated for exploration and development with as many as 156 being relinquished by bidders  citing poor viability and production economies.

Edited by Creamer Media Reporter

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