India Pitches Bigger Oil Resource Pie in Bid to Lure Investments
India has increased the size of its oil and natural gas resources by 50 percent.
(Bloomberg) -- India has increased the size of its oil and natural gas resources by 50 percent because of better data, according to the country’s oil regulator.
The South Asian nation has raised its potential hydrocarbon resources to about 42 billion metric tons from the 28 billion estimated more than two decades ago, said Atanu Chakraborty, head of the Directorate General of Hydrocarbons. Little more than a quarter of that has been proven, leaving scope for new players to unlock the remainder through exploration, he said.
“There are about 222 billion barrels of oil and oil equivalent gas yet-to-be-found resources in India,” Chakraborty said in an interview at his office near New Delhi. “It’s a whole lot for which investors will be looking on very eagerly.”
India is one of the world’s fastest growing energy consumers and Prime Minister Narendra Modi is allowing investors the rare freedom of deciding the areas they want to drill in as he seeks to boost production and cut India’s oil imports by 10 percent by 2022. The world’s biggest explorers have largely shunned exploring in India, often preferring to put their money into countries with better prospects.
Now, India is offering incentives including simpler permits, tax breaks and freedom from pricing restrictions to attract explorers and expertise.
Open Acreage
As many as 55 blocks will be auctioned on Jan. 18 covering about 60,000 square kilometers (23,166 square miles.) These blocks have been carved out by explorers themselves, under the so-called Open-Acreage Licensing Program that was introduced in June last year. The blocks will be awarded to winning bidders by June, Chakraborty said.
The agency has received interest mostly for areas in the northeastern state of Assam, the country’s oldest oil-producing region, and the states of Rajasthan and Gujarat in the west.
The country’s total sedimentary area has also expanded to 3.3 million square kilometers from 3.14 million, Chakraborty said. India is spending more than 29 billion rupees ($453 million) for appraising new areas, comprising more than half of its sedimentary area.
Modi’s government is seeking to gather data of hydrocarbon resources for the nation’s entire exploitable area by 2019 under the National Seismic Program, which will further boost oil and gas prospects and attract exploration.
“God has not changed anything, but our knowledge of petroleum availability has increased,” Chakraborty said. “As more data is available, higher will be exploration and larger will be our reserve accretion.”
To contact the reporters on this story: Debjit Chakraborty in New Delhi at dchakrabor10@bloomberg.net, Saket Sundria in Mumbai at ssundria@bloomberg.net.
To contact the editors responsible for this story: Pratish Narayanan at pnarayanan9@bloomberg.net, Abhay Singh
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