InvestorQ : What was the outcome of the latest oil block bidding by Indian oil companies?
Anamika Sodhani made post

What was the outcome of the latest oil block bidding by Indian oil companies?

Angel dcosta answered.
2 years ago

The bidding for oil blocks under the new Open Acreage Licensing Policy or OALP just concluded. ONGC won 7 out of the 11 geographical areas that were put on offer in the fifth round of bidding while Oil India won the remaining four blocks. All blocks went to PSUs.

According to the Directorate General of Hydrocarbons or DGH, the OALP-5 will generate exploration work commitments from the players to the tune of $400-450 million right away. These 11 blocks given out are spread across 8 sedimentary basins in India.

The 11 blocks include 8 on-land blocks, 2 shallow-water blocks 1 ultra-deepwater block. Normally, the government directed pricing for ultra-deep water blocks is a lot more lucrative compared to the other ordinary blocks.

The only private bidder in the entire fray was Invenire Energy which did not get any allocation as all went to the PSUs. This new OALP is different as it is based on revenue sharing model with reduced royalty terms, no oil cess and marketing and pricing freedom.

Out of the capex planned by the Indian economy, hydrocarbons are expected to be the big driver. For example, energy sector is expected to contribute 24% of the projected CAPEX in infrastructure and exploration in the next 4 to 5 years and ONGC and OIL will play a pivotal role in that scheme of things.