ONGC, Oil India pick up all oil & gas blocks on offer

NEW DELHI:  All oil and gas exploration blocks that went under the hammer in the fifth round of bidding were picked up by state-owned ONGC and Oil India Ltd (OIL). According to officials, the 11 blocks which were offered under the latest round have the potential to produce around $400-450 million (Rs 3,000-3,300 crore).

Oil sector regulator Directorate General of Hydrocarbons (DGH) said in a notice on Thursday that the bidding round under India’s Open Acreage Licensing Policy (OLAP) had seen ONGC winning seven blocks, while the remaining four went to OIL. The only private bidder who participated in the round-Invenire Petrodyne-did not win the bid it made for a single block, which ONGC won.

The remaining ten blocks saw only one bidder each, with ONGC the sole bidder for six blocks and OIL the sole bidder for the rest. The fourth round of bidding had also seen little participation from private bidders with just eight bids received for the seven blocks that went under the hammer.

All seven had been awarded to ONGC. The 11 blocks which went under the hammer in the fifth round are spread across eight sedimentary basins-eight are land blocks (six in Category-I basin and one each in Category II and III basins), two shallow-water blocks (one each in Category-I and II basins) and one ultra-deepwater block (Category-I basin).

Including the fifth round, 105 blocks have been awarded under the OALP bidding system so far. Of these, Vedanta has won 51 blocks, OIL has won 25, and ONGC 24.  However, while there had been significant private sector interest in earlier rounds, the last few have not seen the same kind of participation. So far, the total area that has been auctioned out stands at 1.56 lakh square kilometers.

The licensing policy has also been tweaked in February 2019, with blocks in little or unexplored category-II and -III basins now being awarded to companies offering to carry out maximum exploration programmes. Earlier, licenses had been awarded to companies who offered the maximum share of oil and gas to the government.  

According to officials, the OALP offers bidders reduced royalty rates, no oil cess, marketing, and pricing freedom, freedom to carve out blocks they are interested in, and exploration permission forthe entire contract period.