In the first round of OALP last year, as much as Rs 60,000 crore was committed in the exploration of oil and gas in 55 blocks or areas.
The government is expecting about Rs 40,000 crore of investment in the 14 blocks it put up on auction for prospecting of oil and gas in the second round of open acreage licensing policy (OALP), Oil Minister Dharmendra Pradhan said.
In the first round of OALP last year, as much as Rs 60,000 crore was committed in the exploration of oil and gas in 55 blocks or areas, he said adding a third round of OALP with 12 oil and gas blocks and five coal-bed methane (CBM) blocks would be launched within this month.
The 14 blocks being offered in OALP-II bid rounds cover an area of 29,333 square kilometers and bids close on March 12, he said at the launch event.
Since the BJP-led NDA came to power in 2014, the government has held two auctions of discovered small fields and a similar number under OALP and the cumulative investment committed is Rs 1,20,000 crore, he said.
"In the first OALP bid round, we got an investment commitment of Rs 60,000 crore. In OALP-II we are expecting another Rs 40,000 crore," he said.
India had in July 2017 allowed companies to carve out blocks of their choice with a view to bringing about 2.8 million sq km of unexplored area in the country under exploration.
Under OALP, companies are allowed to put in an expression of interest (EoI) for prospecting of oil and gas in an area that is presently not under any production or exploration licence. EoIs can be put in at any time of the year but they are accumulated twice annually.
The blocks or areas that receive EoIs at the end of a cycle are put up for auction with the originator or the firm that originally selected the area getting a 5-mark advantage.
The two window of accumulating EoIs end on May 15 and November 15 every year. EoIs accumulated till May 15 are supposed to be put on auction by June 30 and those in the second window by December 31.
The first OALP round was launched in 2017 and bids came in by May 2018. EoIs for second round closed on May 15, 2018 and the blocks were supposed to be put for auction by June but the round was delayed.
In the meanwhile, EoIs in the third window also closed on November 15, 2018 with as many as 18 blocks and five CBM blocks, measuring 31,722 sq km, being sought for.
"About 90,000 sq km of India's sedimentary basin was under exploration prior to these bid rounds. In two OALP rounds and two discovered small field (DSF) rounds, the area under exploration has more than doubled," Pradhan said.
The world's third largest energy consumer is looking at boosting out as its economy expands.
State-owned Oil and Natural Gas Corp (ONGC) and a consortium of Reliance Industries-BP of the UK have committed USD 20 billion in exploring and producing oil and natural gas from their Krishna Godavari basin blocks.
The blocks on offer in OALP-II include one in deep waters of Krishna Godavari basin and five shallow water blocks - two each in Andaman and Kutch basin and one in Mahanadi basin. Eight onland blocks - four in Mahanadi basin, two in Cambay and one each in Rajasthan and Cauvery are on offer.
The 14 blocks are estimated to hold in-place resource of 12,609 million tonne of oil and oil equivalent gas.
In OALP-1, mining mogul Anil Agarwal-led Vedanta walked away with 41 out of 55 blocks bid out. State-owned Oil India won nine blocks while ONGC managed to win just two.
State gas utility GAIL, upstream arm of Bharat Petroleum Corp Ltd (BPCL) and Hindustan Oil Exploration Co (HOEC) won one block each.
The 55 blocks have a total area of 59,282 sq km.
Blocks are awarded to the company which offers the highest share of oil and gas to the government as well as commits to do maximum exploration work by way of shooting 2D and 3D seismic survey and drilling exploration wells.
Increased exploration will lead to more oil and gas production, helping the world's third largest oil importer to cut import dependence.
Prime Minister Narendra Modi has set a target of cutting oil import bill by 10 per cent to 67 per cent by 2022 and to half by 2030.
Import dependence has increased since 2015 when Modi had set the target. India imports 81 per cent of its oil needs.
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 the maximum share of oil and gas to the government are awarded the block.The government prior to this had been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round.