Govt may award contracts for first OALP oil and gas field auction in July

The blocks are expected to see cumulative peak production of 15,000 barrels and two million standard cubic meters a day of gas

The government is likely to award contracts for the first round of oil and gas auctions under its Open Acreage Licensing Policy (OALP) in the first week of July.

Anil Agarwal’s Vedanta, Oil India (OIL) and Oil and Natural Gas Corporation (ONGC) would be getting blocks. During the round, Vedanta managed to take 40 of the 55 on offer; OIL and ONGC got the remaining blocks. ONGC, despite bidding for 30 blocks, got less than OIL, said sources.

The 55 blocks are spread across 10 sedimentary basins, covering 60,000 sq km.

The second round of Discovered Small Field (DSF) auctions will be held by the end of July. Earlier, there were reports that it could not start before September due to some technical issues. 

“The bidding process will kick off by July-end. There is no delay in the process,” said an official. In February, the Union Cabinet had cleared 60 DSFs with an estimated 195 million tonnes of oil and oil equivalent.

During the first round of DSF, a total of 30 contracts were awarded, 23 on land and seven offshore areas. The blocks are expected to see cumulative peak production of 15,000 barrels and two million standard cubic metres a day of gas. 

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“The Directorate General of Hydrocarbons has already approved 11 field development plans (FDP) of DSF-I and are expecting other players to also submit these soon. We expect to start production in at least three fields by the end of this year,” said another official. The companies that have given FDPs are Hindustan Oil Exploration Company, Sun Petrochemicals, South Asia Consultancy, Kei Rsos Petroleum, Ramayana Ispat, Nippon Power and Mahendra Infratech. 

On the coming DSF-II round, D S Rajput, managing director of Dubai-based South Asia Consultancy, said: “We plan to bid for two more blocks. Overall, the fields advertised are bigger in area and volume. We feel it is a welcome opportunity.” South Asia Consultancy was the only foreign player that won a block during the first round. 

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The government hopes to reduce import by 10 per cent by 2022. Currently, India is the third largest consumer of oil and petroleum products, after America and China. The National Data Repository that the government had launched also got positive response from the industry. The repository has so far got 277 users.