RIL-BP wins first block under OALP rounds, Oil India, Vedanta bag the most

Govt likely to clear allotment of blocks to successful bidders this week; The two rounds were initially estimated to attract investment worth Rs 80,000-90,000 cr

Global major BP Plc and its partner Reliance Industries (RIL) have jointly emerged as the winner of a block in the fresh round of auction under the Open Acreage Licensing Policy (OALP).

This marks the re-entry of RIL into domestic exploration and production after it stopped bidding for acreages in India.

The block BP and RIL have won is said to be on the east coast.RIL last won a block during the seventh round of auction under the New Exploration Licensing Policy in 2008. At present, RIL is operating in four blocks in India.

According to multiple sources, state-run Oil India has got the maximum number of areas on offer, winning 12 blocks — six each in both the second and third OALP rounds.  The government is likely to give its clearance for allotting the blocks to successful bidders this week. The two rounds were initially estimated to attract an investment of Rs 80,000-90,000 crore.

The Anil Agarwal-led Vedanta group, which had reportedly put in 30 bids, is expected to get five blocks each in OALP-II and OALP-III. During OALP-I, Vedanta was the most aggressive bidder, winning 41 of the 55 blocks on offer. An industry source said the Directorate General of Hydrocarbons (DGH) had shortlisted the list of winning bidders after evaluation and is waiting for the government’s final clearance, likely this week, to sign the contracts.

The country’s largest producer, Oil and Natural Gas Corporation, won eight blocks — seven under OALP-II and one under OALP-I. The only other company that won a block during the OALP-II and OALP-III rounds was Indian Oil Corporation.

Based on the data on the DGH website, 37 blocks were on offer during the two rounds — 14 under OALP-II and 23 under OALP III. Of these, 32 areas will now be allotted to winners for exploration. 

“The government has not received any bids for the remaining five areas,” a source added.

Of the 14 blocks under OALP-II, eight are on land, five are in shallow water, and one is in ultra-deepwater. 

Of the 23 blocks on offer under OALP-III, 19 are on land (including five coal-bed methane), three are in shallow water, and one is in deepwater.  

The current round had adopted all the features of the Hydrocarbon Exploration Licensing Policy, which ensures reduced royalty rates, no oil cess, a uniform licensing system, marketing and pricing freedom, a revenue-sharing model, and exploration rights on all retained areas for a full contract life for bidders.

After taking charge in his second term, Petroleum Minister Dharmendra Pradhan said increasing domestic oil and gas production was priority for him. The first round of the OALP was expected to bring in around Rs 60,000 crore.

With the current two rounds also going onstream, the OALP regime has so far seen committed investment of around Rs 1.4 trillion. Under the OALP regime, blocks are awarded to companies that offer the highest share to the government in a given block.