By Nidhi Verma
India imports four out of every five barrels of crude oil it consumes and is likely to shell out more than $100 billion on oil purchases in 2018/19.
"The emphasis of the new rules is for raising hydrocarbon production," Dharmendra Pradhan, India's oil minister said in New Delhi.
Under the new rules, producers will be given pricing and marketing freedom that is currently non-existent in natural gas blocks in India. Explorers will also be given financial incentives for early production from their blocks, Pradhan said.
"Fiscal incentive is also provided on additional gas production from domestic fields over and above normal production," a government statement said.
Prime Minister Narendra Modi, who is seeking re-election in a few months, has targeted a 10 percent reduction to India's dependence on imported crude by 2022.
However, India's dependence has increased from 78 percent in 2014/15 to an estimated 84 percent in 2018/19, government data shows.
Pradhan said that state-owned companies Oil and Natural Gas Corp and Oil India will be allowed to induct private players to enhance production from its existing blocks and bring in new technology and capital.
The new rules will be largely applicable on 19 basins and on future licensing rounds, he added.
India has 26 sedimentary basins, of which only seven are producing.
Encouraging private partnership can lead to more discoveries and higher production, local broker Emkay said in a report.
(Reporting by Nidhi Verma; Writing by Promit Mukherjee; Editing by David Goodman)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)