India's overhauled oil policy unlikely to be a game-changer: Wood Mackenzie

India's overhauled policy for finding oil and gas is unlikely to be a game-changer as globally exploration budgets have shrunk and the country's prospects are weaker than other regions, natural resources consultancy Wood Mackenzie said Wednesday.

The Union Cabinet in February had approved a policy for awarding acreage, based primarily on exploration work commitment such as drilling of wells. This was aimed at attracting the elusive private and foreign investment to raise domestic output.

International oil companies have stayed away from the three auction rounds held during the last three years that awarded exploration areas to companies that offered the biggest share of the revenue from oil and gas produced.

Contracts for the 32 blocks or areas won by state-owned Oil India Ltd (OIL) and Oil and Natural Gas Corp (ONGC) and private sector Vedanta Ltd in the latest auction were signed on Tuesday.

"In some ways, this marks the end of the first phase of the Open Acreage Licensing Policy (OALP) era. The government has improved the fiscal parameters for blocks that will be available starting with OALP-4," Wood Mackenzie said in its comments on the contract signing.

The change, it said, was "in response to the lack of international oil company participation so far and a potential flaw in the original revenue sharing mechanism."
Vedanta, which won 41 blocks during OALP-1, has further consolidated its position as the country's largest private E&P player, it said. "Replenishing and diversifying the portfolio beyond the RJ-0N-90/1 Rajasthan block is vital for meeting the company's production goal of 500,000 barrels of oil and oil equivalent gas per day."