KOLKATA (miningweekly.com) – India’s reformed oil and gas exploration policy will come into force when the next round of bidding for blocks kicks off in June/July, the sector regulator has announced.
“Parameters of the new policy reforms shall apply from Open Acreage Licensing Policy (OALP) IV onwards,” a notification from the Directorate General of Hydrocarbons (DGH) states.
In a significant relaxation of the exploration and production (E&P) policy framework, the Indian government in February this year junked the revenue sharing contract model that had been in play for the last two years, in favour of a new contract model based on various exploration commitments made by successful bidders. This is aimed at wooing foreign E&P majors, which have shied away from bidding for blocks in auctions held so far.
Alongside minimum benchmark exploration commitments, E&P investors will also enjoy complete marketing and production freedom from oil and natural gas blocks secured by them under the reformed policy, announced in February.
Currently, bidding for oil and gas blocks under combined OALP II and III are under way, which include 23 oil blocks and coal blocks for production of coalbed methane.
The last date of submission of bids was initially set for April 10, but this has been deferred to May 15.
Last year, bidding for OALP II had been deferred and clubbed together with the third round. The DGH never cited any specific reasons for deferment of the second round, nor for the extension of the last date for submission of bids announced earlier this month.
However, industry sources speculate two reasons for such a move by the regulator. The first being Indian national elections that got under way in phases, starting April 11, with the final vote counting set for May 23 - with government not willing to risk any controversy over allotment of natural resource assets amid rising political temperatures across the country.
Secondly, it is being speculated that the latest deferment of the April deadline to May 15 was prompted by the poor response from foreign investors, which could possibly be giving the current round of bidding the miss to rather participate in bidding slated for June/July to get benefits of the reformed policy.