New Open Acreage Licensing Policy (OALP) for oil and gas exploration have been announced by the Union Ministry of Petroleum & Natural Gas. Under the new policy, the bidders will be allowed to carve out areas they want to drill.
The new policy has been designed in such a way that it helps energy famished India and the third-largest oil consumer of the world in attracting greater foreign investment to increase output.
Also, under the new policy, the third-largest oil consumer of the world will conduct oil and gas blocks’ auction under the OALP twice a year. The first auction will be held in the month of July this year, which will be the first major exploration licensing round by India since 2010.
OALP: Key Facts
- OLAP’s objective is to increase indigenous oil and gas production of the nation by maximizing the potential of India’s already discovered hydrocarbon resources.
- Under the new OLAP, government will also conduct oil and gas blocks’ auction twice a year. The first auction to be held in July 2017.
- OALP provides single license for exploring conventional and unconventional gas and oil resources to boost investment in and to provide investors with operational flexibility.
- OLAP will also allow oil and gas exploration and production companies like RIL and ONGC to submit an “Expression of Interest” indicating the area they want to drill.
- Under new OLAP, the government will identify the oil and gas blocks and will put them on auction.
- The new OALP policy aims to increase the domestic oil and gas production, as well as to enhance transparency and reduce administrative discretion.
- Under the new policy, the selection of oil blocks will be according to seismic and the data shared by the Directorate-General of Hydrocarbons in the National Data Repository which offers 160TB data of 26 sedimentary basins of the country.
The OALP auction will be conducted under the revamped exploration licensing policy, which will also provide operators with the marketing and pricing freedom and will bring changes to a revenue sharing model.