India sweetens oil block bids with lease reform, arbitration freedom
From the nine iterations of the oil acreage licensing policy (OALP), the major change in the tenth version, due out in August this year, will be twofold. The first of those is the expanded definition of mineral oils to include shale oil, shale gas and coal-bed methane. The other one is the freedom to pursue international arbitration in the event of disputes, as well as offering a longer lease period for the fields the companies win. Combined with the removal of windfall tax on domestically produced crude that was in effect since July 2022, prospective bidders now have a realistic chance to make profits from their discovered fields. That all of these changes have come through Parliament is significant, since executive notifications, foreign investors have discovered, could be overturned easily. The expanded definitions and wider rights to arbitration come from the amendment in the Oilfields (Regulation and Development) Act of 1948, passed by both Houses of Parliament by March 2025.
Natural gas import bill increases 13% to $15.2 billion in FY’25
India’s natural gas import bill surged by 13% to $15.2 billion during the financial year 2024-25, compared with $13.4 billion in FY24, driven by rising consumption, according to data from the Petroleum Planning and Analysis Cell (PPAC). In March, the import bill increased by approximately 8.3% to $1.3 billion, compared to March 2024. The country imported 36,699 million standard cubic meters (mmscm) of liquefied natural gas (LNG) during FY25, reflecting a 15.4% increase over FY24. India’s natural gas consumption rose by 7% to 72,293 mmscm, driven by higher demand from the city gas distribution (CGD), fertiliser, and power sectors. This pushed the country’s reliance on imported gas to 50.8%, up from 47.1% in the same period last fiscal. Analysts attributed this growth to a combination of rising demand and stabilised global natural gas prices, which had previously surged to record highs in FY23. Despite the rise in imports, domestic natural gas production declined marginally by 1% to 36,113 mmscm during FY25. State-owned Oil and Natural Gas Corporation (ONGC) produced 18,795 mmscm of natural gas during this period, a decline of almost 3% from 19,316 mmscm in FY24. Production remained below targets, highlighting the widening gap between demand and domestic supply.