Mumbai: India’s oil exploration and production sector will see investments worth $40 billion over the next four to five years, petroleum and natural gas minister Dharmendra Pradhan said in Mumbai on Thursday.
“A cumulative investment of $40 billion is expected in Indian exploration and production sector in the near term. Field development plans worth $13.6 billion are already approved and investment worth $11.6 billion have declaration of commerciality,” Pradhan told reporters at a Hydrocarbon Exploration Symposium.
In July, India opened 2.8 million sq km of sedimentary basins for oil and gas exploration with a view to raise domestic production and reduce dependence on oil and gas imports.
“Under Open Acreage Licensing (OAL), $5-6 billion in exploration activities and another $20-30 billion for development activities is expected,” Pradhan said.
India’s upstream petroleum regulator, Directorate General of Hydrocarbons (DGH), has received 51 proposals seeking about 60,000 sq. km of area for exploration of oil and gas under the maiden open acreage licensing. OAL allows companies to select blocks or areas after studying seismic data to explore and produce oil and gas.
Investors can bid for oil and gas fields through the year under OAL and are promised marketing and pricing freedom for oil and gas produced.
“More than 100 companies have visited our data room. They are analysing the data and all companies are coming to the Indian market,” added Pradhan.
The National Data Repository (NDR) holds 160 terabyte information on sedimentary basins. Companies, after studying geological data, can submit EOIs (expressions of interest) for hydrocarbon blocks of their choice.
The last date for submission of EOIs in the first cycle of bidding under OAL is 15 November and winners will be announced in 2018.
India is also working on building a natural gas trading hub that will bring in transparent pricing mechanisms for domestic as well as imported gas, said the oil minister.
“In the coming days, we will take the proposal of a gas trading hub to the government. All consumers should get a pooled price whether it is power, steel or any other industry. There must be some transparent mechanism and that is a gas trading hub or exchange,” added Pradhan.
India is the world’s fourth-biggest importer of liquefied natural gas (LNG), sold on the basis of a government-mandated formula that links the local price to international rates, while most long-term import contracts are linked to crude oil.
Pradhan added that the government is working on a policy framework for increasing oil and gas production from the ageing fields.
“The objective of this policy is to enhance the recovery of hydrocarbons from ageing fields. Production will be enhanced through technological and other collaboration,” he said.