Indian Economy
Bidding Under Open Acreage Licensing Policy
- 16 Jan 2020
- 2 min read
Why in News
Recently, the Government has launched the bidding process offering 11 areas in oil and gas blocks.
- The 11 blocks under Open Acreage Licensing Policy Round-V (OALP-V) are spread across 8 sedimentary basins and include eight on land blocks, two shallow water blocks and one ultra deep water block.
Key Points
- The government has awarded 94 blocks so far under the Hydrocarbon Exploration & Licensing Policy (HELP) regime.
- HELP adopts the revenue sharing contract model.
- OALP-V is expected to generate immediate exploration work commitment of around USD 400-450 million.
- It is a giant step towards improving the ‘Ease of Doing Business’ in the Indian Exploration and Production (E&P) sector.
Open Acreage Licensing Policy
- The OLAP was declared by the union government in June 2017.
- Under it, the potential investors choose the exact areas they are interested in, convey their interest to the government, which then places just those blocks up for bidding.
- Companies are allowed to choose the areas in which they want to explore oil and gas, under OALP. After choosing the area, companies put in an expression of interest which are then put on auction by the government.
- The process offers attractive and liberal terms like reduced royalty rates, no oil cess, marketing and pricing freedom, round the year bidding, freedom to investors for carving out blocks of their interest, a single licence to cover both conventional and unconventional hydrocarbon resources, exploration permission during the entire contract period, and an easy, transparent and swift bidding and awarding process.
