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India receives bids for 10 oil, gas blocks

  • Märkte: Crude oil, Natural gas
  • 11.07.23

The Indian government has received 13 bids for 10 oil and gas blocks it offered it in its latest licensing round held on 5 July.

This was the eighth licensing round under the Open Acreage Licensing programme (OALP) that concluded its bidding round last week after the oil ministry extended the deadline for a year.

India state-controlled upstream firm ONGC placed bids for nine blocks while state-run counterpart Oil India, private-sector resources firm Vedanta and privately-owned Sun Petrochemicals and the joint venture of Indian conglomerate Reliance Industries (RIL) and BP placed bids for one block each.

The Cambay, Assam Shelf onshore blocks along with the shallow water block of Kutch received two bids, while the rest of the blocks received single bids (see table).

ONGC is set to win the Mumbai offshore MB-OSHP-2022/1, Kerala Konkan KK-OSHP-2022/1, Bengal Purnea BP-OSHP-2022/1 shallow-water bocks and Saurashtra GS-DWHP-2022/1, Kerala Konkan's KK-DWHP-2022/1 deepwater blocks without any competition.

RIL-BP and ONGC were the only bidders for the ultra-deepwater blocks in the Krishna-Godavari and Mahanadi basins respectively.

The royalty rate for deepwater and ultra-deepwater fields has been kept at zero for the first seven years, which may increase to 5pc for deepwater after seven years and 2pc for ultra-deepwater.

State-controlled companies continued to dominate India's upstream bidding rounds with little interest from foreign firms, despite the government cutting the windfall tax on domestic crude production to zero in the latest review of its tax scheme.

India cut the windfall levy on domestic crude production to zero from 4,100 rupees/t ($6.84/bl) on 2 May, according to a notification by the Central Board of Indirect Taxes and Customs on 15 May.

India imports about 87pc of its crude needs and has been trying to increase domestic crude production to reduce its import dependence.

Indian oil minister Hardeep Singh Puri said in November 2022 that India will need to raise domestic crude output and purchase assets abroad to make up for the surge in demand. The government aims for 25pc of India's total crude demand by 2030 to be produced domestically.

But India's crude and condensate production during the April 2022-March 2023 fiscal year fell compared with a year earlier. India produced 29.2mn t (586,000 b/d) of crude and condensate during 2022-23, down from 596,000 b/d in 2021-22, according to oil ministry data.

India has already awarded 134 exploration and production blocks comprising a total area of 207,691km², spread across 19 sedimentary basins, in the last seven OALP rounds.

The government introduced the OALP in 2017 to attract oil and gas firms to develop India's upstream sector. The OALP guarantees marketing and pricing freedom with a revenue-sharing model, as well as offering reduced royalty rates.

India OALP blocks
TypeBlockArea (km²)Name of Bidder(s)
CambayOnshoreCB-ONHP-2022/1188.5ONGC, Vedanta
Assam ShelfOnshoreAS-ONHP-2022/12,057.6Oil India, ONGC
Mumbai offshoreShallow waterMB-OSHP-2022/14,108.0ONGC
KutchShallow waterGK-OSHP-2022/1765.5ONGC, Sun Petrochemicals
Kerala KonkanShallow waterKK-OSHP-2022/16,717.6ONGC
Bengal PurneaShallow waterBP-OSHP-2022/15,754.9ONGC
SaurashtraDeepwaterGS-DWHP-2022/12,742.7ONGC
Kerala KonkanDeepwaterKK-DWHP-2022/11,112.7ONGC
Krishna GodavariUltra-deepwaterKG-UDWHP-2022/11,199.6RIL-BP
MahanadiUltra-deepwaterMN-UDWHP-2022/19,717.3ONGC

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