Oil-Starved India to Expedite Exploration Auction

Posted by Joseph Keefe

India plans to auction some oil exploration blocks by
June and will allow bidders to carve out areas where they want to
drill in order to attract greater interest, a government official
told Reuters on Wednesday.

The move is part of a drive by New Delhi to quickly generate
income from its oil and gas reserves.

India overhauled its exploration licensing last year with a shift
to a revenue sharing model, while also allowing pricing and
marketing freedom to the operators.

The planned auction will be India's first major exploration
licensing round since 2010, although the energy-starved nation
recently awarded 31 small fields to mainly local firms.

The world's third-biggest oil and gas consumer imports nearly
three-quarters of its energy requirements, but Prime Minister
Narendra Modi has set a target of cutting its fuel import
dependency to two-thirds by 2022 and to half by 2030.

India will soon set up national data repository that would
provide bidders preliminary data on exploration areas that will
go under the hammer, the official told Reuters on condition of
anonymity.

The South Asian nation's previous licensing rounds saw a lukewarm
response from global oil giants because of tax issues and doubts
about the quality of the blocks on offer.

In the next licensing round, firms would study the data and
delineate the area they want to bid for instead of depending on
the government to prepare the exploration block.

The oil ministry has hired consultant Price Waterhouse Coopers
(PWC) to advise on the process for the next licensing round, the
source said.

PWC will provide details including the size of areas to be
offered, the frequency of the bidding process and preparation of
bid documents, he said, adding most of the exercise is over and
auctions would be launched in a few months.

India produces around 727,000 barrels of oil per day (bpd),
mostly from fields which were awarded decades ago. The country's
proven oil reserves amounted to 5.7 billion barrels in 2015,
according to the BP Statistical Review.

By Nidhi Verma

Feb 22, 2017

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