As many as 51 proposals seeking about 60,000 square kilometre of area for exploration of oil and gas have been bid for in India's maiden auction under open acreage licensing regime, upstream regulator DGH has said.
India in July opened 2.8 million sq km of sedimentary basins for oil and gas exploration in a bid to raise domestic production and cut excessive dependence on imports.
The Open Acreage Licensing (OAL), which allows companies to select blocks or areas after studying seismic data to explore and produce oil and gas, "is witnessing an encouraging response from the industry," the DGH said.
OAL replaces the old system of government carving out areas and bidding them out. OAL allows investors to carve out their own areas and put in an expression of interest (EoI).
Once an EoI is received for an area, it is put on competitive bidding and any company offering the government maximum share of oil and gas is awarded the block.
"So far 51 expression of interests (EOIs) have been received covering an area of approx 60,000 sq km," the Directorate General of Hydrocarbons (DGH) said in a post announcing a roadshow for OAL in Mumbai later this week.
Oil Minister Dharmendra Pradhan will lead the roadshow on October 26, which will "serve as a platform for discussion on the new policy reforms in the sector," it said.
He will also interact with heads of exploration and production (E&P) companies, oil and gas service providers, financial institutions and private equity firms to "take a holistic view of financial and allied community on the sector," DGH said.
Last date for submission of EoI in the first cycle of bidding under OAL is November 15 and winners would be announced by January 1.
OAL is being offered under the Hydrocarbon Exploration and Licensing Policy (HELP) that provides revenue sharing model for bidding for oil and gas blocks. It promises marketing and pricing freedom for oil and gas produced.
Under OAL, companies can carve out any area that is currently not under any licensee, and evince interest for doing exploration and production.
Once an area is selected, the government will put it up for bidding and any firm offering the maximum share of oil or gas produced from the area would be awarded the block.
Till now, the government has been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round.
So far 256 blocks had been offered for exploration and production since 2000. The last bid round happened in 2010. Of these, 254 blocks were awarded. But as many as 156 have already been relinquished due to poor prospectivity.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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