India’s biggest oil, gas bid round gets 4 bidders
New Delhi: India’s largest oil and gas bid round under the Open Acreage Licensing Policy (OALP) saw participation from four bidders, including state-owned giants Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL), as well as private sector players Vedanta Ltd and Sun Petrochemicals Ltd. According to the Directorate General of Hydrocarbons (DGH), the majority of the 28 blocks offered under the OALP-IX round received only two bids, highlighting a concentrated competition within the sector.
For the first time, Reliance Industries Ltd-bp plc combined joined hands with ONGC to bid for a block in the Gujarat-Saurashtra basin, a shallow-water area. This marks a significant development, as Reliance and bp had previously participated in only two of the eight bid rounds since the OALP began in 2017. In those rounds, they bid and secured two blocks on their own. Their collaboration with ONGC in this round reflects a strategic shift as the consortium sought to tap into new exploration areas.
ONGC, the country’s largest oil and gas producer, placed bids for 14 blocks independently and teamed up with OIL and Indian Oil Corporation (IOC) for four additional blocks. Including its joint bid with Reliance-bp, ONGC has a presence in 19 out of the 28 blocks offered.
Meanwhile, mining tycoon Anil Agarwal’s Vedanta Ltd submitted bids for all 28 blocks, continuing its dominant participation in India’s oil and gas exploration auctions. Sun Petrochemicals Ltd, another private player, bid for seven blocks.
Of the 28 blocks up for grabs, four blocks received three bids each, while the remainder had just two bidders. Vedanta was a common contender in every bid.
The blocks are awarded to firms that offer the highest share of revenues generated from oil and gas production and commit to the most comprehensive work programmes.
The blocks on offer spanned a total area of 136,596.45 square kilometres across nine onshore blocks, eight shallow-water blocks, and 11 ultra-deepwater blocks, located across eight sedimentary basins.
The OALP was introduced in 2017 as part of the government’s push to attract investments in India’s upstream oil and gas sector. The policy offers significant incentives to exploration and production firms, including marketing and pricing freedom and a revenue-sharing model, along with reduced royalty rates for operators. To date, 144 blocks covering 242,055 square kilometres have been awarded in the eight previous rounds of the OALP.
In the preceding OALP-VIII round, ONGC had secured seven out of the ten blocks on offer, while the Reliance-bp consortium, OIL, and Sun Petrochemicals secured one block each.
The partnership between Reliance and bp has lasted over a decade, with the companies jointly operating the KG-D6 block in the Krishna Godavari basin. The deep-water block currently produces around 30 million standard cubic metres of gas per day.
India, which imports a significant portion of its oil needs, is keen on ramping up domestic production to reduce its annual $222 billion oil import bill.
