Contest for exploration licenses vanishing in India
New Delhi: Contests have almost disappeared for India’s exploration licenses lately with private players staying away from auctions and two state players – ONGCNSE 1.74 % and Oil IndiaNSE 0.42 % - winning acreages without much challenge.
In the fifth round of bidding, the latest under the Open Acreage Licensing Policy (OALP), the government received just 12 bids for 11 blocks on offer. This included 7 bids by ONGC and 4 by Oil India. For just one block, ONGC will compete with a private bidder, Invenire Petrodyne Ltd. All other blocks would go to ONGC and Oil India without a contest.
In the fourth round, a total of eight bids were received, including seven from ONGC and one from Oil India. Here again, ONGC got six blocks without a contest. It outbid Oil India for the seventh block.
Interests from private players were limited even at the beginning of the OALP auction rounds but has tumbled in recent rounds. Total number of bids have also sharply fallen.
“We need more policy reforms to attract private and foreign players. Lower oil prices would make it harder for us to attract private bidders in future rounds,” a senior executive at an oil firm said.
In the first bidding round under OALP in 2018, the government received a total of 110 bids for 55 blocks, an average of two bids for each block. In the latest round, it’s 12 bids for 11 blocks, or just about one bid for a block.
Vedanta bid for all 55 blocks on offer in the first round and won 41. It won another ten blocks in the second and third rounds but hasn’t made a bid since.
The Economic Times 03-07-2020