The Open Acreage Licensing Policy (OALP) will introduce monthly expression of interest (EoI) windows for companies seeking deepwater and ultra-deepwater oil and gas blocks in India. The Directorate General of Hydrocarbons (DGH) announced the special bidding round on Monday. Each window will open on the first day of the month and remain open for 21 days, allowing 12 opportunities annually.
Under the new system, evaluation, bidding and block awards will proceed independently for each monthly window. This will allow companies to participate without waiting for a single annual round. The initiative forms part of the Centre’s ₹84,084-crore Samudra Manthan scheme to expand domestic oil and gas production.
OALP Shifts Focus to Committed Work Programmes
The special round will assess bids based on the work programme committed by bidders, without requiring revenue-share quotes during bidding.
The DGH notice assigns 10 marks to the originator of a block and another 10 marks to bidders with demonstrated deepwater or ultra-deepwater drilling experience.
The change is particularly significant for Category-I basins, which have proven hydrocarbon resources and established commercial production. Under the existing framework, revenue-share bids carried 30 of the 100 marks for Category-I blocks. The work programme carried 65 marks, while the originator received five marks.
Category-II and Category-III basins, which lack established commercial production, were already evaluated primarily on the work programme, with 10 marks for the originator. The existing framework did not award marks for drilling experience and required operators to demonstrate at least one year of operatorship experience.
New Revenue-Sharing Terms for Deepwater Blocks
The special round will also revise revenue-sharing arrangements for Category-I deepwater and ultra-deepwater blocks.
During the first five years of production, the government will receive a revenue share only when a windfall gain occurs. From the sixth year, the government will receive the higher of 5% of revenue or the applicable windfall-gain share.
Under the existing modalities, windfall gains arise when annual revenue from a contract area exceeds USD 2.5 billion. The applicable government share increases across revenue slabs:
- USD 2.5 billion to USD 5 billion: 10% of revenue within the slab.
- USD 5 billion to USD 10 billion: 30% of revenue within the slab.
- Above USD 10 billion: 50% of revenue within the slab.
Previously, Category-I bidders quoted revenue shares at daily revenue thresholds of USD 0.05 million and USD 7 million, with the share at the higher threshold capped at 50%. The existing framework also allowed deepwater contractors to pay the lower quoted rate for the first seven years after early monetisation of a discovery.
OALP Eases Conditions for ONGC and OIL Consortia
The special round introduces relaxations for consortia operated by Oil and Natural Gas Corporation (ONGC) or Oil India Limited (OIL).
If the operator demonstrates 100% of the required net worth, the authorities will not separately assess the net worth of qualifying international oil company or foreign national oil company partners. The relaxation applies to eligible companies and their exploration and production subsidiaries with a net worth of at least USD 10 billion.
Eligible partners may also assign their interests without prior government consent if the assignee is an Indian national oil company that has already signed the contract.
The notice further states that a parent company financial and performance guarantee will not be required when a bidder qualifies based on its standalone net worth.
Single Bid Bond for Multiple Special OALP Bids
Bidders may submit a single revolving bid bond of USD 2 million for multiple bids under the special round. Alternatively, they may furnish a separate bond with each bid.
The bond must take the form of an electronic bank guarantee (e-BG) or an insurance surety bond regulated by the Insurance Regulatory and Development Authority of India (IRDAI).
Under the existing modalities, bidders had to submit a bond of USD 20,000 per sector with each bid, subject to an overall cap of USD 200,000. The bond could be issued as a bank guarantee or insurance surety bond and was valid for 12 months.
Samudra Manthan to Support Offshore Exploration
The special OALP round will operate under Samudra Manthan, the National Offshore Exploration Scheme approved by the Union Cabinet on July 31, with an outlay of ₹84,084 crore through 2030-31.
The scheme allocates ₹43,200 crore to drilling 60 deepwater and ultra-deepwater exploratory wells. The government will support up to 50% of eligible drilling costs, subject to a cap of ₹675 crore per well. It has estimated the cost of an individual deepwater exploratory well at USD 125 million to USD 150 million.
A further ₹28,534 crore has been allocated for offshore seismic data acquisition.
Detailed OALP Bidding Terms Awaited
The DGH said the detailed Notice Inviting Offer (NIO), Model Revenue Sharing Contract (MRSC) and special OALP modalities will be published on its website and the e-bidding portal.
It has encouraged prospective bidders to identify areas of interest through the National Data Repository (NDR) before the first monthly EoI window opens. The advance notice is for information only, with the final bidding conditions to be specified in the detailed documents.
