NEW DELHI: Having committed USD 2.3 billion investment, energy firms such as Cairn Oil & Gas spent USD 75 million (about Rs 550 crore) in oil and gas hunt in the first two years of India's maiden open acreage licensing policy, according to the Directorate General of Hydrocarbons (DGH).
In a bid to expedite oil and gas exploration and raise domestic production, the government had in 2018 launched the first bid round under the Open Acreage Licensing Policy (OALP) that allowed explorers to carve out desired areas for exploration and offered liberal terms.
Five rounds have been concluded so far, with winners of the fifth bid round announced on Thursday.
In the first four rounds, USD 2.317 billion investment was committed by firms such as Vedanta Group firm Cairn Oil & Gas, state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd in 99 blocks awarded for exploration and production of oil and gas, according to the latest data put out by the DGH.
Of this, USD 75 million has so far been invested till March 31, 2020, DGH, the upstream nodal authority of the Oil Ministry, said. OALP offers revenue sharing contracts where operators bid for a share of oil and gas they would share with the government, with the one offering the highest share winning the block.
OALP replaced the New Exploration Licensing Policy (NELP) under which contracts were awarded to firms that committed to investing most in exploration of oil and gas. While OALP offers complete pricing and marketing freedom, the government had a role in deciding pricing as well as customers of gas in NELP rounds.
The 1.38 lakh square kilometre of area offered for finding oil and gas in the first four rounds of OALP was double the acreage of the 254 blocks awarded in nine rounds of NELP between 1999 and 2010. The biggest chunk of USD 815 million was committed in the OALP-I round that saw Cairn Vedanta walking away with 41 out of the 55 oil and gas blocks on offer.
DGH said that only USD 46 million has been invested so far from the total amount. In 14 blocks of OALP-II, USD 452 million investment was committed, but only USD 2 million has been invested so far in exploration.
The third round of OALP saw USD 709 million commitment in 23 blocks, of which USD 21 million has been invested. Only USD 6 million out of the USD 341 million committed in seven OALP-IV blocks have been invested so far.
NELP attracted USD 29.15 billion investment since its launch in 1999 against the committed spending of USD 11.7 billion.
Against the USD 11.728 billion committed for exploration in the 254 blocks awarded in nine rounds of NELP, USD 17.09 billion was invested. Another USD 12.061 billion was invested in developing discoveries made in those blocks.
While no discovery has so far been made in the OALP blocks, 1,163.50 million tonnes of oil and oil equivalent gas reserves were established in NELP blocks. DGH had on October 22 announced the winners of the OALP-V round, with ONGC walking away with 7 out of the 11 blocks on offer.
OIL won the remaining 4 blocks. The round attracted just 12 bids for the 11 blocks on offer. The previous bid round, OALP-IV, had also seen just eight bids coming in for seven blocks on offer. ONGC had walked away with all the seven oil and gas blocks on offer.