The much- awaited signing of contracts for 55 blocks awarded under the Open Acreage Licensing Programme (OALP) Bid Round-I took place on Monday.
The contracts, which were to be initially signed on September 6 were deferred by the Directorate General of Hydrocarbons (DGH) — the upstream technical arm of the Ministry for Petroleum and Natural Gas — without citing any reasons.
Speaking at the contract-signing event, Minister for Petroleum and Natural Gas, Dharmendra Pradhan, said “We have a firm investment commitment of ₹6,000 crore in these 55 blocks.”
According to the 2P (initial estimates) analysis, there is an in place resource of ₹1.45 lakh crore in these blocks, the Minister claimed. Under the open acreage regime, bidders are allowed to decide the areas they wished to bid for. Effectively the bidders can carve out the blocks they want from the entire acreage data available to them. The DGH then calls for bids to establish rights of developing the assets based on the amount of revenue the companies can share with the government.
An official statement said, “Initially, 110 e-bids were received for 55 blocks on offer with participation from 9 companies, singly or in consortium. Finally, contracts have been signed for all 55 blocks with 6 companies.” This will see an accretion of 59,282 sq. km to the exploration area. This is about 65 per cent of the area currently under exploration in the country, the statement added.
Anil Agarwal’s Vedanta — Cairn Oil & Gas — bagged 41 of the 55 blocks. Speaking to reporters after the event, Executive Chairman at Vedanta Resources, Anil Agarwal said, “We will spend ₹3,000-4,000 crore in exploration of these 41 blocks. We are roughly assuming 400 thousand barrels of oil production from these blocks and they will require a complete investment of $4 billion.”
Pradhan said the Centre is gearing up for the next round of bids under the open acreage regime. “We will offer 14 blocks in the next round of bids. Four of these blocks in the Mahanadi Basin have been carved out by the Directorate-General of Hydrocarbons and 10 blocks have been identified by bidders.”