ONGC grabs 7 oil and gas blocks in latest bidding round, Reliance wins 1

New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) won seven areas for exploration of oil and gas while a consortium of Reliance Industries Ltd and BP Plc walked away with one in the latest bid round.

Oil Minister Hardeep Singh Puri said 10 blocks for exploration and production of oil and gas were offered in the eighth round of Open Acreage Licensing Policy (OALP-VIII).

Contracts for the 10 blocks were signed on Wednesday morning, he said.

Of the 10 blocks offered, ONGC won seven while Reliance-BP, Oil India Ltd and Sun Petrochemicals Pvt Ltd got one area each.

Parallelly, three coal-bed methane (CBM) blocks too were awarded and the ninth round of OALP was launched for bidding.

"Estimated investments in awarded blocks for a committed exploration work programme is to the tune of USD 233 million," an official note said.

India had offered 10 blocks for bidding in the eighth round of the OALP in July 2022. After extending the bid deadline a few times, the round closed in July 2023.

Five companies -- ONGC, Vedanta Ltd, Oil India Ltd (OIL), Sun Petrochemicals Pvt Ltd and Reliance-BP Exploration (Alpha) Ltd -- put in 13 bids for the 10 blocks on offer in OALP-VIII, according to the Directorate General of Hydrocarbons (DGH).

Seven of the 10 blocks on offer received single bids and the other three blocks had two bidders each. Global energy giants like ExxonMobil, Chevron and TotalEnergies, which India has been courting to give a fillip to exploration and production, did not put in any bid.

ONGC was the sole bidder for six blocks while Reliance-BP was the sole bidder for the ultradeep sea block in Krishna Godavari basin, according to the DGH.

In all, ONGC bid for nine out of the 10 blocks. It did not bid for the block bid by Reliance-BP. ONGC won seven out of the nine blocks it had bid.

Reliance and BP have more than a decade-old partnership and had won a block in one of the previous OALP rounds.

The government has been hoping that opening up more acreage for exploration will help boost India's oil and gas production, helping cut down the USD 222 billion oil import bill.

In 2016, it brought in an open acreage policy which moved away from the previous practice of government identifying and bidding out blocks to one where explorers were allowed the freedom to identify any area outside of the ones that are already with some company or other, for prospecting of oil and gas.

The areas identified are to be clubbed twice a year and offered for bidding. The firm identifying the area gets a 5-point advantage.

But except for the first round, private sector participation has been scant. Mining mogul Anil Agarwal's Vedanta Ltd walked away with 41 blocks out of the 55 blocks on offer in the very first round and got another 10 areas in two subsequent rounds.

Other rounds have been dominated by state-owned firms.

"A momentous occasion in India's quest towards expanding and strengthening oil exploration & production footprint which will significantly accelerate our journey towards energy self-sufficiency," Puri said on the OALP-VIII contract signing. "The steps that the government has taken in the energy sector in the last two years will play a key role in reducing our dependence on energy imports."

He said an OALP-IX bid round has been launched.

"Contracts signed for 3 Coal Bed Methane Blocks awarded under Special CBM Bid Round- 2022," he said.

Under the OALP VIII bid round, a total of 10 blocks were offered for bidding comprising an area of 34,364 square kilometres, spread across 9 sedimentary basins and included 2 onland blocks, 4 shallow water blocks, 2 deep water blocks and 2 ultra deep-water blocks, he said.

Under Special CBM Round-2022, 16 CBM blocks spread over 5,817 square kilometres in seven states were offered for bidding. "Estimated investments in awarded blocks for a committed exploration work programme is to the tune of USD 7.4 million," he said.

As a major reform in the E & P sector, the Hydrocarbon Exploration & Licensing Policy (HELP) was approved in March 2016. "In continuation to its determination for the reduction in import dependency of oil & gas & accelerating E&P activities, policy reforms were notified in the upstream sector in February 2019 & again in May 2023 with a focus to shift from 'revenue' to 'production' maximisation. There is also continued focus on greater transparency & streamlined procedures," he said.

In continuation of its aggressive acceleration of E&P activities & adhering to the prescribed timelines, the government has now launched OALP -IX for international competitive bidding, he added.

In the last round, OALP-VII, ONGC walked away with three out of eight blocks on offer while OIL won two blocks and state-owned gas utility GAIL was awarded one block. Sun Petrochemicals Pvt Ltd won the remaining two blocks in the Cambay basin.

In OALP-VI, ONGC won 18 out of the 21 areas on offer. OIL walked away with two blocks and Sun Petrochemical got one block.

A new policy for finding and producing oil and gas called HELP was promulgated on March 30, 2016.

Since then, eight bid rounds of OALP have been concluded and 144 exploration and production blocks awarded. These blocks cover over 2.44 lakh square kilometres of area.