The government of India has once again pushed the deadline for submission of bids for the eighth oil and gas exploration round under the Open Acreage Licensing Policy (OALP) to May 16, 2023.
In this round, the government is offering 10 blocks. The current OALP round was launched on July 7, 2022, with the deadline for submitting bids being September 6, 2022. However, this was shifted forward several times without any explanation from the government.
Industry experts believe the extension is majorly due to lack of interest from investors for the offered blocks.
The sedimentary basins or blocks offered in the previous bids have mostly been awarded to state-run public sector undertakings (PSUs) because of muted participation from private and foreign players.
Despite several calls by the government, private oil companies have been hesitant to bid for the blocks. Experts believe that private players are not showing interest as the basins in India are not quite promising and would require a lot of expenditure for exploration.
Deepak Jasani, Head of Retail Research, HDFC Securities, said, “Private players have not participated in these bids as the potential for oil may not be very large in these basins. Additionally, there are too many regulatory changes (by the government).”
Jasani added that another factor for muted participation by private players is the uncertainty around the outlook for crude oil and natural gas prices.
