Only 8 bids for 7 oil blocks: Tweaked licensing terms draw little interest

India's offer of seven oil blocks on revamped licence terms attracted just eight bids from state-owned firms including six single bids in the latest licensing round ignored by both private and foreign companies.

The Directorate General of Hydrocarbons (DGH) in a statement said state-owned Oil and Natural Gas Corporation (ONGC) bid for all the seven blocks while Oil India Ltd (OIL) put in an offer for one block at the close of bidding on Thursday.

The block in Rajasthan saw competition from ONGC and OIL but the five in Madhya Pradesh and one in West Bengal saw single bids from ONGC, DGH said.

"Seven onland blocks were on offer (in the fourth round of Open Acreage Licensing Policy) with an area of approx 18,500 sq km," DGH said. "The results demonstrate continued interest of established players in Indian E&P (exploration and production) with bids received for all 7 blocks. The evaluation of the bids would be undertaken in a time-bound manner." The fourth round of bidding under OALP had the lowest number of blocks. While the first round got 110 bids for 55 blocks, the second round attracted 33 bids for 14 blocks. The third round saw 42 bids for 23 blocks. In the previous three rounds together, 87 blocks have been awarded covering an area of 1.18 lakh sq km.

"Expression of interest submission window for the OALP-V bid round is open till November 30, 2019, and companies have another opportunity to take part in the blossoming Indian exploration and production sector," the DGH said in the statement.

OALP-IV was the first round on revamped terms approved in February 2019.

DGH said that unlike previous rounds where blocks were awarded to companies offering a maximum share of oil and gas to the government, blocks in little or unexplored category-II and III basins will be awarded to companies offering to do maximum exploration programme.

While blocks in Madhya Pradesh fall in the Vindhyan basin which is a category-II basin, Bengal Purnea basin is category-III area where no exploration has happened so far.

Under OALP, companies are allowed to carve out areas they want to explore oil and gas in. Companies can put in an expression of interest (EoI) for any area throughout the year but such interests are accumulated thrice in a year. The areas sought are then put on auction.

The fifth cycle of submitting EoIs is currently going on till November 30, 2019, and would be followed by the sixth cycle from December 1, 2019, till March 31, 2020, DGH said.