State-owned Oil & Natural Gas Corporation Ltd. and Vedanta Ltd. today emerged as the biggest bidders for oil and gas blocks, putting in 41 out of 56 bids received in India’s maiden auction under open acreage licensing regime.
ONGC put in expression of interest for 41 areas while Vedanta’s oil unit, Cairn India, sought rights over 15 areas, people privy to the development said. Hindustan Oil Exploration Company Ltd. bid for one area in a round that was shunned by biggies like Reliance Industries Ltd.
India in July opened 2.8 million square kilometre of sedimentary basins for oil and gas exploration in a bid to raise domestic production and cut excessive dependence on imports.
The Open Acreage Licensing allows companies to select blocks or areas after studying seismic data to explore and produce oil and gas. The first round of bidding closes today.
In all, 56 expressions of interest or EoIs have been received so far, sources said. Oil India Ltd. is the other main bidder while the rest are smaller companies. BP Plc team visited data room but has not put in any bids so far, they added.
OAL replaces the old system of government carving out areas and bidding them out. OAL allows investors to carve out their own areas and put in an EoI. Once an EoI is received for an area, it is put on competitive bidding and any company offering the government maximum share of oil and gas is awarded the block.
The last date for submission of EoI in the first cycle of bidding under OAL is today and winners would be announced by Jan. 1.
OAL is being offered under the Hydrocarbon Exploration and Licensing Policy that provides revenue sharing model for bidding for oil and gas blocks. It promises marketing and pricing freedom for oil and gas produced. Under OAL, companies can carve out any area that is currently not under any licensee, and evince interest for doing exploration and production. Once an area is selected, the government will put it up for bidding and any firm offering the maximum share of oil or gas produced from the area would be awarded the block.
Till now, the government has been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round.
So far, 256 blocks had been offered for exploration and production since 2000. The last bid round happened in 2010. Of these, 254 blocks were awarded. But as many as 156 have already been relinquished due to poor prospective.