10th oil and gas bidding round only after passage of oilfield Bill

Upcoming legislation meant to streamline exploration and production

The 10th round of bidding for exploration and production (E&P) of oil and gas assets will be announced after the government hopes to pass the Oilfields (Regulation and Development) Amendment Bill, 2024, in Parliament during the upcoming Budget session, officials said.

 

The Bill was passed in the Rajya Sabha in the last session but is yet to clear the Lower House. It clarifies the granting and extension of petroleum leases separate from mining leases, allows for international arbitration, and creates a new dispute resolution mechanism for the E&P sector.

 

More importantly, it introduces an easier regime for doing business and streamlines approval processes, which have been pointed out as “difficult” by global majors like Chevron, ExxonMobil, and Total Energies, officials said. “As a result of the reforms envisaged under the Oilfields Amendment Bill, we are hopeful the upcoming Open Acreage Licensing Policy (OALP)-X round will receive considerable interest from global players,” a petroleum ministry official said.

 

Since both crude oil and natural gas are found in the pore spaces of subsurface rocks and are extracted by drilling, the delinking of terms like ‘mine’, ‘quarried’, or ‘excavated’ — as referred to in the current Act, dating from 1948 and last amended in 1969 — will remove ambiguity.

 

Companies had also praised the government’s move to incorporate a larger set of hydrocarbons in the new Bill. For example, it introduces the term ‘Mineral Oils’ in place of ‘Oils’, and brings a wide range of mineral oils, including shale oil, gas hydrates, and coal bed methane, within its ambit.

 

The Centre estimates 651.8 million metric tonnes of recoverable crude oil reserves and 1,138.6 billion cubic metres of recoverable natural gas reserves within India’s 3.36 million square kilometre sedimentary basin.

 

A long time coming

 

By the time the Budget session begins at the end of January, it will have been more than a year since the ninth round of OALP bidding opened in January 2024. At that point, the government had also signed contracts for 10 blocks awarded under the OALP-VIII bid round. Meanwhile, while the results of the OALP-IX round have not been officially announced, it has seen no foreign participation.

 

“Currently, an estimated 10 per cent of the sedimentary basin is under exploration, and the Centre had plans to increase this to 16 per cent by the end of 2024. This target has now been extended to 2025,” an official said. The share of the basin under exploration was 6 per cent back in 2014 when the Narendra Modi government first took charge.

 

Under OALP, India allows upstream companies to carve out areas for oil and gas exploration. Exploration companies can submit an expression of interest for any area throughout the year. Such interests are accumulated three times a year, after which the areas sought are put up for auction.

 

BIG PLANS

 

·         $100 billion E&P opportunities in India by 2030 outlined by the Centre

·         1 million sq. km Exploration acreage targeted by decade-end

·         144 Exploratory blocks awarded by Centre so far under 8 bidding rounds

·         99% Erstwhile ‘no-go’ areas in India’s exclusive economic zone opened up