The Indian Government has initiated a fresh round of auctions for 14 blocks intended for oil and gas prospecting. The auction falls under the umbrella of the Open Acreage Licensing Programme (OALP), a part of the liberalized Hydrocarbon Exploration and Licensing Policy (HELP). This article explores various aspects of this crucial initiative.
The Blocks for Auction
Of the 14 blocks up for auction under the OALP-II, one is based in the deep waters of the Krishna Godavari basin. Additionally, five shallow water blocks are available with two each in Andaman and Kutch basin and one in the Mahanadi basin. Eight other land blocks on offer are spread across numerous locations, including four in the Mahanadi basin, two in Cambay, and one each in Rajasthan and Cauvery. Together, these areas encompass approximately 29,000 square kilometers and are projected to contain an in-place resource of 12,609 million tonnes of oil and oil equivalent gas.
Procedure of the Auction
Under OALP, organizations have the freedom to express interest (EoI) for exploring oil and gas in areas not currently licensed for production or exploration. Once the EoIs are received and a cycle ends, the blocks are auctioned. The original firm that selected the area gets a 5-mark advantage. The highest bidder, offering the government the most significant share of oil and gas as well as the most extensive exploration work via seismic surveys and drilling exploration wells, earns the rights to the block.
Impact of the Auction
This expanded exploration could augment domestic oil and gas production, thereby reducing India’s dependency on oil imports. Furthermore, new blocks could attract substantial sector investment and create jobs. These measures align with the government’s goal of reducing the country’s oil import bill by 67% by 2022 and 50% by 2030.
Potential Impact
| Description | Estimated Impact |
|---|---|
| Boost in domestic oil and gas production | Cuts down import dependence |
| New block investments | Generates employment, attracts sector investment |
| Achieving government target | Reduces oil import bill by 10% to 67% by 2022 and half by 2030 |
Hydrocarbon Exploration Licensing Policy (HELP)
The government has launched HELP to replace the former National Exploration and Licensing Policy (NELP). The new policy introduces uniform licensing for all forms of hydrocarbon exploration and production, an open acreage policy, an easy-to-administer revenue-sharing model, and marketing and pricing freedom for crude oil and natural gas. It allows contractors to explore conventional and unconventional oil and gas resources including coal bed methane, shale gas/oil, tight gas, and gas hydrates.
Open Acreage Policy and the New Regime
With the advent of the Open Acreage Policy, Exploration and Production (E&P) firms can choose blocks from a designated area, replacing the old method of government-assigned areas. The new policy offers marketing and pricing freedom while transitioning to a revenue-sharing model where companies offering the maximum share of oil and gas to the government are awarded the block. This aligns with the government’s policy of “Ease of Doing Business” and “Minimum Government – Maximum Governance.”
National Data Repository
The National Data Repository (NDR) serves as an integrated data repository of Exploration and Production (E&P) data across Indian sedimentary basins. As a wholly government-owned E&P data repository, it provides an unparalleled platform for all E&P Operators, Service Companies, Investors, and Academics to delve into diverse datasets from Indian sedimentary basins.
Concept of Seismic Surveys
Reflection seismology, or seismic reflection, is a method of exploration geophysics that uses the principles of seismology to estimate the earth’s subsurface properties based on reflected seismic waves. The method requires a controlled seismic energy source, such as dynamite or a specialized air gun.
