The Ministry of Petroleum & Natural Gas (MoPNG) has extended the bid submission period for 10 oil and gas blocks under the eighth round of Open Acreage Licensing Programme (OLAP) for international competitive bidding (ICB).

The last date of submitting bids for the 10 blocks, spread over nine sedimentary basins and covering an area of 36,316.5 sq km, is January 31, the Directorate General of Hydrocarbons (DGH) said in a notification. In July 2022, the DGH had floated the notice inviting offers (NIO) for the exploration and development of oil and gas blocks in India under the Hydrocarbon Exploration & Licensing Policy (HELP).

The 10 blocksinclude two on-land blocks, four shallow water blocks, two deep water blocks and two ultra-deep water blocks. It is expected that this round will generate an immediate exploration work commitment of around $600-700 million.

The exercise is part of the government’s plans to reduce the country’s dependence on imports. India, which roughly consumes 5 million barrels of crude oil per day, imports around 85 per cent of its crude oil and 50 per cent of its natural gas requirement. In this round as well, the MoPNG is trying to incentivise offshore exploration through a graded system of reduced royalty rates.

To incentivise early commercial production, the concessional royalty rates will be applicable if production commences within four years for onland and shallow water blocks and five years for deep water and ultra-deep water blocks from the effective date of contract. To further incentivise domestic oil and natural gas output, the government, in June, allowed exploration and production (E&P) companies the freedom to sell crude oil produced by them domestically to any company within the country, including PSU refiners, with effect from October 1, 2022. Before this, the MoPNG took a call on how much crude oil is allocated to a producer.

Furthermore, in the ninth round under OLAP floated in October 2022, the government has offered 26 blocks covering an area of around 2.23 lakh sq km spread over nine sedimentary basins.