Date ArticleType
1/16/2018 Member News
First Auction Of Exploration Blocks In Eight Years To Be Held Tomorrow

First auction of exploration blocks in eight years to be held tomorrow

BY ET BUREAU | UPDATED: JAN 16, 2018, 11.42 PM IST

India will launch the first auction of exploration blocks in eight years on Thursday, inviting bids for 55 blocks, the chief of country's upstream regulator has said.

This will be the first auction under the new Hydrocarbon Exploration Licensing Policy, which lets companies carve blocks of their choice, and gives them freedom to market and price their oil and gas.

Under the new policy, the government accepts Expression of Interest (EOI) from interested players round the year but bunches these applications for evaluation every six months.

The government has received 57 EOIs from 6 companies, all Indian, in the first round. Of these, two EOIs were withdrawn after more than half the area indicated in their applications overlapped with existing leases or regulatory no-go zones.

The balance 55 blocks covering 59,000 square kilometres will be opened to bidding from Thursday. "We have quality acreage in this round since investors have studied the data and expressed interest in these blocks," said Atanu Chakraborty, Director General at the Directorate General of Hydrocabrons (DGH), which is overseeing the licensing process.

Nearly two-thirds of EOIs have been received for onshore blocks, a quarter of applications for shallow fields and the balance for deep water fields. The highest number of EOIs have come for blocks in Assam.

After having examined the EOIs, the government is now inviting bids from other interested parties for these blocks from Thursday. The companies will have time until March-end to submit their bids. The bids will be evaluated on two criteria of minimum work programme and revenue share offered by the participants- both criteria will have equal weightage of 50 marks each. The company that has submitted EOI will get 5 bonus marks for that block under the criteria of minimum work programme, which comprises the amount of seismic surveys and drilling of wells that a bidder promises to undertake.

All bids will be evaluated, and winners announced by third week of May, Chakraborty said.