In a bid to attract "big oil" to India, the government is close to finalising an Open Acreage Licensing Policy, which gives companies a round-the-year window to pitch for oil and gas in blocks of their choice.
In a strategic move to boost offshore energy exploration and operational efficiency, Oil and Natural Gas Corporation Ltd (ONGC) and Reliance Industries Ltd have signed an agreement to share resources such as supply vessels used in finding and producing oil and gas.
Oil India has discovered natural gas reserves off the Andaman Islands, the state-owned firm said without putting an estimate of the size of the find. In a statement, OIL said "occurrence of natural gas" was reported in the second exploratory well Vijayapuram-2 drilled in the Offshore Andaman Block AN-OSHP-2018/1, which the company had won under the Open Acreage Licensing Policy (OALP).
The pricing and marketing freedom for exploitation would be capped by a ceiling price.
Launching a major global initiative for attracting foreign investment in the hydrocarbon sector, India on Monday held a roadshow in London for auctioning 55 oil and gas exploration blocks.
Oil regulator DGH has recommended stiff penalties on state-owned Oil and Natural Gas Corp and Reliance Industries Ltd for default on commitments made by them on oil and gas exploration blocks awarded under NELP.
Reliance had carried out the minimum work obligation in block KK-OSN-97/2 (awarded to the company in first round of New Exploration Licensing Policy), KK-DWN-2000/1 and KK-DWN-2000/3 (NELP-II) and decided not to enter the subsequent phase, a company official said. The poor prospectivity of the basin was evident from NELP-VI round when the basin could not attract any bids for two blocks and a third block was awarded on a single bid.
India is the third largest consumer of petroleum products, after the US and China.
The global economic meltdown and the gas dispute between the Ambani brothers may trip India's largest ever auction of oil and gas blocks as the two factors are likely to keep major foreign firms from bidding, the sector regulator feels.
The Oil and Natural Gas Corporation is set to win seven of the 20 oil and gas blocks auctioned in January while Reliance Industries would bag six.
However, supermajors Chevron, ExxonMobil and Conoco Philips of US, who were expected to partner Reliance Industries, did not participate.
India on Tuesday opened its largest oil and gas bid round, offering 25 blocks covering 1.91 lakh square kilometers mostly in offshore area, as the government looks to boost domestic production to cut imports and help energy security. Petroleum Minister Hardeep Singh Puri launched the 10th bid round under the Open Acreage Licensing Policy (OALP) at the India Energy Week (IEW) in Mumbai.
In a move that may boost the Indian hydrocarbon industry and bring more investments into the sector, the Union Cabinet on Wednesday decided to give marketing freedom to domestic crude oil producers, allowing them to sell petroleum to any company in the local market. The move is set to be beneficial for major crude oil producers, such as state-run Oil and Natural Gas Corporation (ONGC) and Oil India, and private sector majors like Vedanta's Cairn Oil and Gas and Reliance Industries. As of May 31, India was dependent on imports for 86 per cent of its crude oil consumption; domestic production sufficed the remaining 14 per cent demand.
The government had allowed companies in February last year to launch probe missions to find more oil and gas within already-producing areas.
India's biggest oil and gas bid round attracted four bidders that included state-owned ONGC and OIL and private sector Vedanta Ltd, with most blocks getting just two bids, according to Directorate General of Hydrocarbons (DGH). The OALP-IX bid round, where 28 blocks or areas spread over 1.36 lakh square kilometre were offered for finding and producing oil and gas, for the first time saw Reliance Industries Ltd-bp plc combine bidding together with ONGC for one block in Gujarat offshore.
As domestic demand for gas will rapidly increase, new gas sources need to be explored.
The Cabinet Committee on Economic Affairs last month allowed ONGC and Oil India Limited to tap shale resources in blocks allotted to them on a nomination basis.
In a presentation to investors in Mumbai last week, Aramane Giridhar, Joint Secretary (Exploration) gave detailed reasons for pendency of decisions in the Ministry of Petroleum and Natural Gas where officials approved of decisions but refused to issue formal orders, resulting in delays in production of oil and gas.
The continuation of the tax holiday will come as a relief to oil and gas companies, which have already invested huge money in exploration of hydrocarbons. It will also help the petroleum ministry, which has been promising the tax holiday while marketing the auction of oil and gas block under the New Exploration and Licensing Policy.
After awarding oil and gas blocks under NELP-VI, the government is now turning its focus to the seventh round of the New Exploration and Licensing Policy (NELP-VII).
Oil India is set to usher in a new era with a road map drawn to ramp up production and diversification plans to foray into liquefied natural gas
Though the developments are positive, analysts say the benefits will accrue only in the long run
The shortage of drilling rigs across the world is likely to delay the seventh round of auction of oil and gas blocks, under the New Exploration and Licensing Policy, till October-November this year.
So far, 254 blocks of oil and gas have been auctioned.
RIL, which had made four consecutive gas discoveries with close to 500 billion cubic feet of in-place reserves in block, proposed immediate relinquishment, its minority partner Hardy Oil and Gas plc of UK said on Wednesday.
'An internationally established price of crude will encourage more players to invest in India, leading to enhanced domestic production which can be made available to domestic refineries,' recommends Anil Agarwal whose company Vedanta Resources has a controlling stake in Cairn India that operates the country's biggest onland oilfield in Barmer, Rajasthan.
Pradhan met Energy Secretary Rick Perry during an unscheduled trip to the US Capitol and discussed energy cooperation between India and the US, Indian investment in Liquefied natural gas and shale sectors, and the possibility of the US exporting LNG to India from early next year.
India's latest bid round for 21 oil and gas blocks attracted just three bidders, two of whom were state-owned explorers Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL), according to upstream regulator DGH. As many as 21 blocks or areas were offered for exploration and production of oil and gas in the Open Acreage Licensing Policy (OALP) Bid Round-VI, for which bidding closed on October 6. Besides ONGC and OIL, Sun Petrochemicals was the only other company to have bid, according to 'Summary of Bids Received Against Offered Blocks' posted by the Directorate General of Hydrocarbons (DGH).
Energy conglomerate Reliance Industries and its partner BP plc on Friday said they have made a second deep-water gas condensate discovery in the Cauvery basin, off the east coast.
Pradhan said a National Data Repository which will store information on all sedimentary basins of the country is being pursued on top priority.
With foreign investment almost drying up in India's oil and gas sector, Petroleum Minister Dharmendra Pradhan has promised an overhaul to make policies predictable, transparent and fair to investors.
These 7 blocks are adding exploration acreage of 18,510 square kilometres spread over three sedimentary basins of India and have a resource potential of approximately 33 billion barrels of oil and oil equivalent gas.
Be it roads, railways, ports, civil aviation, energy or electricity, the Narendra Modi govt has invigorated all these sectors since it took over, says Arvind Panagariya.
22 companies won bids for the 31 contracts on offer; 15 were new entrants to the oil and gas business. Three years on, none of them have started production.
To proceed with a Cabinet proposal to grant the relaxations to RIL, the Election Commission's approval will be sought.
Indian oil and gas exploration companies work in silos.
Reliance Industries on Friday hit out at Oil and Natural Gas Corp (ONGC) for suing it over KG gas dispute, saying some elements in the state-owned firm may be "misleading" the chairman D K Sarraf to hide their failure in developing the discoveries made over 13 years.
A Texas company will submit a report by June on whether a company controlled by RIL 'stole' natural gas from the wells where ONGC is contracted to operate in the KG basin, as alleged by ONGC.
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