Houston (US), March 7 (IANS) India will auction oil and gas blocks twice a year under the Open Acreage Licensing Policy (OALP), with the first round to be held coming July, Petroleum Minister Dharmendra Pradhan has said.
The July auction will be India's first under the Hydrocarbon Exploration Licensing Policy (HELP), Pradhan said on Monday at a promotional event for HELP here at CERA Week 2017.
"The most important reform is the HELP that opens up India' entire sedimentary basin for investment from domestic and foreign players under a simplified, transparent and investor -friendly fiscal and administrative regime," he said.
"The new policy aims to provide investors a ready access to huge amount of seismic data available in National Data Repository, flexibility to carve out exploration acreages through an open acreage licensing process and increased operational autonomy through a new revenue-sharing model," he added.
The government has already put up 67 small oil and gas fields for auction under HELP, approved in March 2016, which is based on a revenue-sharing model as opposed to cost-and-output-based norms earlier.
The new model will replace the controversial production-sharing contract (PSC) that has governed the bidding under nine earlier NELP rounds. The PSC regime, which allows operators to recover all investments made from sale of oil and gas before profits are shared with the government, was criticised by India's official auditor, who said it encouraged companies to keep inflating costs so as to postpone sharing of profits.
"In the new model, government will not micromanage, micro monitor with producers. Government will only share revenue. It will be an open and regular affair," Pradhan told reporters here on sidelines of the conference.
Now under HELP, eventual operators will be issued a single licence for exploration of conventional and non-conventional hydrocarbons and will have the freedom to sell oil and gas at "arms length" market prices.
OALP will be a departure from the existing licensing policy by which government identifies the oil and gas blocks and puts them on auction. It gives the explorer company the option to select the exploration areas on its own based on data available in the National Data Repository.
Responding to a query, Pradhan also told reporters that India is open to the idea of investing in America's energy sector'and acquiring assets if it gets a good deal.
"If we get good asset, good property, why not? For long-term asset acquisition, current price is not the only factor what we are looking after. We are looking after geology of the project, logistic of the project. And also the market condition," he said.
"So, price is not the only issue," he added.