Call Us: +91-11-23073004, 23073042 | Mail: info@bureaucracytoday.com

PSU MARKET

OALP concludes Round 1

Staff Reporter, New Delhi
03/05/2018   0 Comments

The first ever auction of blocks under the Open Acreage Licensing Programme in India, by the name of OALP Bid Round – I, concluded recently. Path breaking Hydrocarbon Exploration and Licensing Policy (HELP), approved by the Union Cabinet chaired by Prime Minister Narendra Modi, in March 2016, has been the centre-piece of upstream Oil and Gas sector reform process in the country. The OALP under the aegis of HELP is meant to steer India as a global Exploration and Production (E&P) investment destination.

Dharmendra Pradhan, Union Cabinet Minister for Ministry of Petroleum and Natural Gas, inaugurated the National Data Depository and launched the OALP process in June 2017. 55 EoI’s received were put on bid in the month of January 2018. These 55 blocks were spread all across the Indian sedimentary areas, namely, Assam-Arakan (19), Mumbai Offshore (2), Cambay (11), Rajasthan (9), KG (5), Cauvery (3), Kutch (2), Saurashtra (2), Himalayan Foreland (1) and Ganga (1) basins. Digital marketing campaign was carried on several websites globally during the bidding period for attracting the attention of global fraternity. Round the clock support was provided by the DGH facilitation desk and the bid platform service provider, to clarify any issues the prospective bidders faced. 

Since inception of NELP, when bidding at such a large is taking place, this is the highest number of bids since 2009. After the success of Discovered Small Field (DSF) bid round- 2016, this is the first time that the bids were invited under the new Revenue Sharing Regime for the exploration blocks, where bidders quoted Revenue Share and their Work Programme commitments, with no need for audits for their expenses and with clearly defined timelines for exploration and development. In spite of challenging global market environment, where E&P investments are in consolidation mode, Directorate General of Hydrocarbons (DGH) received 110 e-Bids for the 55 blocks on offer by the deadline of 1200 Hours (IST) on May 2, 2018. Despite the above challenges, the response to OALP Bid Round-I has been very favourable and reaffirmed the investor sentiment in the Indian E&P sector. The overwhelming response received from the investor community is a testament of Investor’s confidence in the renewed policy framework chronicled by Government. A measure of competition can be gauged by the fact that only two blocks received single bids. Rest all, received two or more than two bids.  Hitherto 87% of Mining lease area was controlled by the National Oil Companies, but with the advent of HELP and DSF, new private players have shown considerable interest in Indian E&P sector thereby leading to further private investments in this sector.  

Also, this bid round sees a huge accretion of 60,000 sq.km to the exploration area. This is about 60% of the area presently under exploration. Out of the total 110 e-bids received, 92 e-bids were received for inland blocks and 18 e-bids were received for offshore blocks. As many as 9 companies (Individually or as member of the bidding consortium) have participated in the bid round. The response to the OALP Bid Round has been overwhelming as compared to the last round of E&P auctions under the NELP regime in 2009-10, largely credited to the new policy reforms which have improved the ease of doing business by introducing a transparent regulatory framework. It is pertinent to mention that all the 55 blocks offered in OALP Bid Round – I have been bid and it is a 100% success. Out of 55 blocks on offer, 46 are on onland, eight are in shallow water and one in deep water. The evaluation of the bids would be undertaken in a time bound manner and decision on award would be taken by the Empowered Committee of Secretaries and Group of Ministers, after the commercial bids are opened. The Government endeavours to award the blocks by June 2018, so as to expedite the exploration activities to establish some part of the huge prognosticated conventional hydrocarbon resources of the order of 230 billion barrels of O+OEG in the “Yet-to-Find” category. As OALP is a continuing process, success in this bid round is likely to spur many new investors for second and subsequent Rounds.

WRITE A COMMENT

...
Sign in with
Or procced without registration