Bidding for 55 hydrocarbon blocks under HELP starts

A new chapter in India’s hydrocarbon exploration history was added on Thursday as the government started the bidding process under the first round of Open Acreage Licensing Policy (OALP) in which 55 blocks have been put under the hammer. OALP is a critical part of Hydrocarbon Exploration Licensing Policy (HELP) which was approved in March 2016. Notably, since the last round of bidding under the National Exploration Licensing Policy (NELP) in 2010, this is the first bidding round for oil and gas exploration. While the last date to submit bids is April 3, blocks will be awarded by May. “This bidding has seen many firsts including the fact that bidders carved out the area. Bidders have shown interest for a substantive around 60,000 square km area,” said petroleum minister Dharmendra Pradhan while releasing the notice inviting offers for the blocks.
Under OALP, six companies submitted expression of interest (EOI) for the 55 blocks after studying data from the National Data Repository, and these blocks have now been put up for bidding through a secret mechanism on a platform hosted by mjunction Services, a joint venture between Tata Steel and Steel Authority of India . Moreover, operators will have the flexibility to choose either petroleum operations contract (POC) or reconnaissance contract (RC). While RC will have a contract period of three years, those under POC will get eight years for exploration and 20 years for development and production. There will also be an option to migrate from reconnaissance contract to petroleum operations contract after three years. Chakraborty added that during the current round, no application for RC have been submitted.
Also, explorers will get a single licence for all forms of hydrocarbon exploration (including Shale and coal-bed-methane) and simplified revenue-sharing model with marketing and pricing freedom. Pradhan said the aim of the government is to bring maximum revenue to the exchequer through investor-friendly models. The director general of hydrocarbons, Atanu Chakraborty, said that the single licence for all the hydrocarbon products is the real game-changer during under the new regime. “This does not mean that India will not go for shale and CBM auctions separately in future,” he added. Under OALP, bidding will be held twice a year.
Pradhan said EOIs have been submitted for 10 sedimentary basins across 11 states and Uttar Pradesh and Himachal Pradesh will first time come under the exploration map. “First time, activities have increased in Kutch offshore. It is a sign of collective effort,” he said. Other states include Rajasthan, Gujarat, Andhra Pradesh, Tamil Nadu, Assam, Arunachal Pradesh and Tripura, apart from offshore blocks.
Out of the total 311 exploration blocks awarded so far under discovered field, Pre-NELP and NELP rounds, only 178 blocks are operational now. According to the petroleum ministry, after the ninth round of NELP in 2010, a total of 117 companies are operating in India, of which 48 are foreign companies. Of India’s total sedimentary area of 3.14 million square km, 2.7 million square km was on offer under OALP during the initial stage including 1.5 million sq km onshore and 1.2 million sq km offshore.
Apart from the current round, the government also conducted bidding for discovered small fields under which 31 contract areas awarded to 22 firms, of which 15 were new entrants. These put together, according to Pradhan, will go a long way in achieving the country’s target to reduce import dependence by 10% by 2022.
Link: http://www.financialexpress.com/market/commodities/bidding-for-55-hydrocarbon-blocks-under-help-starts/1020864/?utm_source=whatsapp&utm_medium=social&utm_campaign=WhatsappShare

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