New Delhi: India launched its largest oil and gas bid round on Tuesday under the Open Acreage Licensing Policy (OALP), offering 25 blocks covering 1.91 lakh square kilometres, primarily in offshore areas. The move is part of the government’s efforts to boost domestic production, reduce imports, and enhance energy security.
Petroleum and Natural Gas Minister Hardeep Singh Puri inaugurated the 10th bid round (OALP-X) at the India Energy Week (IEW), highlighting its significance in expanding hydrocarbon exploration. The new bid round spans 13 sedimentary basins, with 13 of the blocks located offshore.
Puri highlighted the government’s efforts to revise legislative frameworks based on partner feedback, transitioning from production-sharing to revenue-sharing agreements since 2016. He noted that the previous decade, from 2006 to 2016, was relatively lacklustre, but the current narrative is being reversed with significant advancements and collaborations, such as ONGC’s major discoveries and offshore seismic surveys.
Puri emphasised the remarkable progress in India’s energy sector, stating that the evolving landscape presents substantial economic opportunities for global partners. He highlighted unprecedented developments across various sectors, from exploration to green energy initiatives. India’s achievements in renewable energy, particularly in biofuel and green hydrogen production, were also underscored. Under Prime Minister Narendra Modi’s leadership, India has made significant strides in ethanol blending, achieving a 20 per cent blend six years ahead of schedule. Puri noted that India is not only producing green hydrogen but also exporting green ammonia to Germany and Singapore. The minister also highlighted India’s expanding energy partnerships, revealing productive meetings with ministers from Qatar, Venezuela, Russia, and Tanzania, among others. He mentioned that India now imports energy from 39 countries, up from 27 earlier, and expressed optimism about securing increased oil supplies from Venezuela as global constraints on its exports ease.
Discussing India’s transition toward cleaner energy, Puri stressed the need to balance current energy demand with future green alternatives. He cited advancements in compressed biogas, flex-fuel vehicles, and small modular reactors as key developments. India’s progress in reducing clean solar energy costs from 25 cents to 3 cents per unit was also highlighted.
Petroleum Secretary Pankaj Jain, who accompanied the minister, pointed out that the Make in India initiative now encompasses a robust supply chain for refinery projects, including international startups participating in global competitions.
When asked about India’s readiness to adopt Brazil’s model of showcasing both gasoline and ethanol prices at fuel stations, Puri confirmed that India was “very close” to implementing such systems, especially as ethanol usage increases beyond 20 per cent.
In the previous nine OALP rounds, a total of 3.78 lakh sq km area was offered. The last bid round, OALP-IX, was the largest before the current round, featuring 28 blocks covering 1.36 lakh sq km.
OALP-IX, launched in September, attracted four bidders, including state-owned Oil and Natural Gas Corporation (ONGC), Oil India Ltd, and private sector Vedanta Ltd. Most blocks received two bids. Notably, it saw Reliance Industries Ltd and BP Plc bidding together with ONGC for a Gujarat offshore block. Reliance-BP, which had bid in only two of the past eight rounds since 2017, previously won the two blocks it contested and collaborated with ONGC for the first time in OALP-IX.
The government has yet to award blocks from OALP-IX. ONGC bid for 14 blocks independently and for four additional blocks with partners such as Oil India Ltd (OIL) and Indian Oil Corporation (IOC). With its bid alongside Reliance-BP, ONGC was involved in 19 out of the 28 blocks offered.
Vedanta Ltd, owned by mining tycoon Anil Agarwal, bid for all 28 blocks, while Sun Petrochemicals Ltd submitted bids for seven blocks. Of the 28 blocks, four received three bids each, while the remaining saw two bids, one consistently from Vedanta Ltd. The bidding process awards blocks to companies offering the highest revenue share and committing to an extensive work program. The OALP-IX blocks included nine onshore, eight shallow-water, and 11 ultra-deepwater blocks across eight sedimentary basins.
Since its introduction in 2017, the OALP has allocated 144 exploration and production blocks covering 2.42 lakh sq km. The policy provides marketing and pricing freedom, a revenue-sharing model, and reduced royalty rates to attract investment.
India, which imports oil worth $222 billion annually, hopes to boost domestic production through frequent bid rounds.