The government on Wednesday awarded Oil and Natural Gas Corporation (ONGC) all the seven blocks that were on offer under the fourth round of Open Acreage Licensing Policy (OALP). Out of the seven blocks, five are located in Madhya Pradesh, while one block each are in Rajasthan and West Bengal.
The seven blocks are spread over three sedimentary basins with resource potential of approximately 33 billion barrels of oil and oil equivalents of gas.
The latest round added another 18,510 square kilometres (sq km) to the total exploration area of the country.
Union Petroleum minister Dharmendra Pradhan said on Wednesday that bids for another 20,000 sq km area would be finalised soon as part of the fifth round.
The first four rounds are expected to generate an investment of approximately $2.35 billion over the next three to four years in exploratory work alone.
"During the last two fiscals, the government has successfully bid out 1,40,000 sq km for exploration and production. In addition, over these years, we have improved our policies multiple times," Pradhan said. According to reports, only 90,000 sq km was under exploration till 2018.
During the first round of OALP, 55 blocks were awarded followed by 32 blocks during the second and third round, for which blocks were awarded jointly.
Early this week, finance minister Nirmala Sitharaman had unveiled a National Infrastructure Pipeline (NIP) of Rs 102 trillion, out of which energy sector is expected to contribute about 24 per cent of the projected capital expenditure in infrastructure. "We will see more investment than said in that plan for petroleum and natural gas," Pradhan said.
He added that the major change in government policy was the concept of revenue maximisation to production maximisation. The current rounds provide more sops to the investors including reduced royalty rated and uniform licensing, following a revenue sharing model.
Speaking about technology infusion, Pradhan said, “Technology, science has seen tremendous progress in recent times. Our oil and gas companies are adopting digitisation, new technologies for leapfrogging growth.”
The cumulative exploratory work commitment after the four rounds of OALP comprise 29,270 LKM of 2D seismic survey, 43,272 sq km of 3D seismic survey, 369 exploratory wells and 290 core analyses to establish shale resources.
The four OALP bid rounds conducted till date have been a success with total of 94 blocks awarded covering an area of 1,36,790 sq km to leading E&P companies. The operators of these blocks have since then initiated petroleum exploration activities or are in final stages of obtaining Petroleum Exploration Licenses (PELs).
The fifth cycle of submitting Expressions of Interest (EoIs) closed on November 30, 2019 while the sixth cycle of EoI is open till March 31 this year.
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