OALP: A Govt initiative to reduce dependence on energy imports
Minister of Petroleum and Natural Gas, Dharmendra Pradhan, launched the National Data Repository (NDR) and Open Acreage Licensing Policy (OALP) process under the Hydrocarbon Exploration and Licensing Policy (HELP) of the government of India on 28 June 2017. HELP was approved by the Union Cabinet chaired by Prime Minister Narendra Modi, in March 2016.
The move is aimed at making sustained and significant efforts to accelerate exploration and production (E&P) activities in the country. The demand for petroleum oil and gas is expected to grow from 229 million tonne in 2018 to 607 million tonne by 2040. The government targets to reduce import dependence by 10 percent by 2022.
OALP gives an option to a company looking for exploring hydrocarbons to select exploration blocks on its own, without waiting for formal bid round from the Government. Under OALP, a bidder intending to explore hydrocarbons like oil and gas, coal bed methane, gas hydrate, etc can apply to the Government seeking exploration of any new block which is not already covered by exploration.
This is the first time that the bids are invited under the new Revenue Sharing Regime for exploration blocks, where the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas, etc.
OALP Round-I
The maiden bidding round under OALP (bid Round-I) was launched in January 2018 and concluded on 2 May 2018. A total of 55 blocks across 10 sedimentary basins of India were put on offer, spread across onland (46), shallow water (offshore) (eight) and deepwater areas (one), covering 59,282 sq km. These blocks are spread across:
As many as nine companies (single or in consortium) participated in the bidding process. These included five public sector units -- the Oil and Natural Gas Corporation (ONGC), Oil India (OIL), GAIL India, the Indian Oil Corporation (IOCL), Bharat Petro Resources (BPRL) and four private entities -- Vedanta, Selan, Hindustan Oil Exploration Company (HOEC), and Sun Petro. A total of 110 e-bids were received, of which 92 e-bids were for inland blocks and 18 for offshore blocks. The Ministry awarded all 55 blocks under OALP Round-I to six companies and contracts regarding the same was inked on 1 October 2018.
As per the latest information available with Projects Today, work on the exploration has been taken one step ahead with floating of tenders for various works. A total of 13 tenders have been floated for business consultancy services for pre-seismic environmental impact assessment (EIA) study of OALP-I Block prior to 2D and/or 3D seismic survey; PMC for development and exploration activities; land rig, various drilling and completion services, among others.
Among the above contracts, Kadam Environmental Consultants bagged a contract for environmental impact assessment (EIA) studies (pre-drilling) for OALP in South Baghewala block (area 516 sq km) and Siyasar block (area 3,012 sq km) in Rajasthan.
OALP Round-II
Following the successful awarding of Round-I, the next round of bidding for OALP was launched on 7 January 2019 and to be continued till 12 March 2019. However, the closing date for submission of bids was extended up to 15 May 2019.
A total of 14 E&P blocks with an area of approximately 29,233 sq km were offered for bidding in OALP Round-II. Of the 14 blocks, 10 are based on Expressions of Interest (EoI) submitted by the bidders while the remaining four have been carved out by the Government, based on data received through the National Seismic Programme and the Resource Reassessment Study carried out by the Government. The total blocks put on offer spread across onland (eight), shallow water (offshore) (five) and deepwater areas (one). These blocks are spread all across:
Of the companies participated in the bidding process, five companies bagged the 14 blocks put on offer. Vedanta and Oil India walked away with five and six blocks, ONCG, Indian Oil Corpn and RIL-BP Exploration took one block each. It is expected that Round-II will generate immediate exploration work commitment of around USD 500-600 million.
OALP Round-III
In this round 23 blocks including 18 oil and gas blocks and five coal-bed methane (CBM) blocks were put on offer. These blocks are spread over 12 Sedimentary Basins, 13 states and offshore areas covering an area of 31,722 sq km. Of the 23 blocks, 19 are onland (including five CBM), three in shallow water and one in deepwater. Moreover, 18 blocks are based on EoI submitted by the bidders and five CBM Blocks have been carved out by DGH.
The bidding process for OALP Round-III was launched on 10 February 2019 with closing date for May 2019. With 23 blocks on offer, 18 oil and gas blocks were awarded, while the remaining five blocks, all coal-bed methane, saw no response from the bidders. Two public sector undertakings (PSUs), Oil India and ONGC, took away 13 blocks, while one private company Vedanta secured five blocks. In Round-III, the government is expecting up to USD 700 million of investment.
Overall, 92 blocks have been put on offer in a span of one-and-a-half year of which 87 blocks have been given out for exploration activities. Of these, Vedanta secured 51 blocks, Indian Oil Corpn 21 and ONGC 10 blocks.
Apart from this, the acreage which stood at around 90,000 sq km in 2017 has been increased to 1,50,000 sq km after OALP Round-I and will touch 2,10,000 sq km after OALP Round-II and -III bidding. With another two rounds of bidding (Round IV and V) expected to be finalised, the area is expected to touch 3,00,000 sq km.