India aims to boost domestic oil production to reduce reliance on crude imports. Credit: Zbynek Burival on Unsplash.

The Indian Ministry of Petroleum and Natural gas has put on offer for exploration 23 oil and gas blocks in the third bidding round under its open acreage licensing policy (OALP).

The blocks being offered in the latest bidding round cover a total area of 32,000km².

Of the 23 available blocks, 18 blocks are based on expressions of interest (EoIs) submitted by bidders and the remaining five have been designated for extraction of coal bed methane.

The auction for the exploration licences was launched at Petrotech, a three-day industry conference in Greater Noida.

“The government has opened more than 120,000km² of acreage for exploration during the last year.”

The Indian Government expects the auction to fetch an investment ranging between $600m and $700m towards immediate exploration work.

The OALP Bid Round-I launched last year saw the government award contracts for 55 blocks, with Vedanta winning the majority of them.

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Last month, India launched the second bidding round, which offered 14 blocks under a petroleum operation contract for international competitive bidding.

The government has opened more than 120,000km² of acreage for exploration during the last year.

Under the OALP policy, the government offers reduced royalty rates, no tax on oil, a uniform licensing system for exploration and production of all forms of hydrocarbons, and marketing and pricing freedom for oil and gas produced from the block.

Licence holders are also entitled to exploration rights on all retained areas for the entire duration of the contract.

The company offering the maximum share of oil and gas to the government is declared the winner of the bid for a block.

The blocks offered for bidding in the latest round are spread across a number of states, including Gujarat, Tamil Nadu, Andhra Pradesh and Madhya Pradesh.

The push towards greater investment in domestic oil and gas exploration is part of the government’s plans to reduce dependence on oil imports, which accounts for a major share of the imports and contributes to the fiscal burden.

India aims to cut oil imports to 67% by 2022.

In a separate move, the government aims to develop the national gas grid in a bid to enhance gas coverage in the country.