Oil and Natural Gas Corporation (ONGC) will be investing close to $400 million in the next four years to develop the blocks it has won under the Open Acreage License Programme (OALP) bid rounds. ONGC has been awarded five blocks including operatorship in two blocks, under OALP Round-1. In the second and third rounds, ONGC has been awarded eight blocks. “We have started the seismic survey on the blocks acquired under OALP I, II and III. This will be costing around 3 to 4 per cent of the total exploration spend of these blocks. This will be followed by exploratory drilling. In all, we intend to spend close to $400 million to develop these blocks,” an ONGC official told the source.
“The spends on OALP blocks will reflect in the financial year 2020-2021,” he added. On the capital expenditure (capex) plans for the year, an ONGC presentation stated that capex target for financial year 2019-2020 has been set at ₹329.21 billion, capex in fiscal 2018-2019 stood at ₹294.49 billion and ₹284.27 billion in fiscal 2017-2018.
The spends are part of ONGC’s efforts to boost domestic oil and gas production. According to an investor presentation, the company is investing around ₹860 billion in 27 major projects to boost oil and gas production, which has plateaued over the last few years. This is largely because most of ONGC’s blocks are ageing and not producing as much hydrocarbons as they once did.
To incentivise exploration and production, the centre formulated and approved a new exploration and licensing policy titled Hydrocarbon Exploration and Licensing Policy (HELP) on March 30, 2016. In order to operationalise the HELP framework, the OALP bid rounds were launched. This allowed upstream operators to put in offers for blocks of their choice for contracting based on the data available in the National Data Repository.
