India will today put on auction 55 exploration blocks in the first bid round in eight years that will offer a record area for prospecting of oil and gas, the head of country's upstream regulator said.
This will be the first auction under the new Hydrocarbon Exploration and Licensing Policy (HELP) that allows companies to carve out blocks of their choice with a view to bringing about 2.8 million square kilometres of unexplored area in the country under exploration.
Atanu Chakraborty, Director General of the Directorate General of Hydrocarbons (DGH) said the HELP brought in open acreage licensing policy that allowed companies to put in an expression of interest (EoI) for prospecting of oil and gas in any area that is presently not under any production or exploration licence.
The blocks or areas that receive EoIs are put up for auction with the originator or the firm that originally selected the area getting a 5-mark advantage.
"The EoI opened in July last year and we got EoIs for 57 blocks by the end of the deadline on November 15. After scrutiny and eliminating areas in no-go zone and overlapping, 55 blocks remain which are being put up for auction beginning tomorrow," he told here.
The 55 blocks have a total area of 59,282 sq km.
"This is significant when we compare it to about 1,02,000 sq km being under exploration currently. The round opening tomorrow would lead to jump in area under exploration by 50 per cent," he said.
State-owned Oil and Natural Gas Corp (ONGC) and Cairn India - a unit of Vedanta Ltd, had put in 41 out of 57 bids received in November last year. Private player Hindustan Oil Exploration Co (HOEC) bid for one area in a round.
He said the opening up of 2.8 million sq km of sedimentary basins for oil and gas exploration will help raise domestic production and cut excessive dependence on imports.
Bids are expected by the first week of April and blocks would be awarded by June end.
The new policy replaced the old system of government carving out areas and bidding them out. It guarantees marketing and pricing freedom and moves away from production sharing model of previous rounds to a revenue sharing model where companies offering maximum share of oil and gas to government are awarded the block.
In the new policy, "regulatory oversight burden is less and handholding is more," he said.
Till now, the government has been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round.
So far 256 blocks had been offered for exploration and production since 2000. The last bid round happened in 2010. Of these, 254 blocks were awarded. But as many as 156 have already been relinquished due to poor prospectivity.