Taxes on petrol, diesel may go up further to mobilise additional revenue for Covid relief
The economic crisis triggered by the Covid-19 pandemic and subsequent pressure on revenues may again push the Centre to raise excise duty on petrol and diesel. Sources indicated that another Rs 3-6 per litre increase in excise duty on petrol and diesel may come soon if the government felt the need to mobilise more resources to finance additional economic recovery packages to fight Covid-19 related disruptions. This level of increase could provide government additional revenue to the tune of Rs 60,000 for full year. In the balance period, about Rs 30,000 crore could be mobilised. An internal examination to look at duty structure on the two products is on and exact timing of the announcement may be finalised soon, sources indicated. Government wants that any duty hike on petrol and diesel should not result in an increase in the retail price of the two products as it would not be popular with the consumers besides the increase could have inflationary implications on the economy. Experts said that current juncture would be ideal for an excise duty on petrol hike as petrol and diesel prices have not been revised for the past almost a month even though global crude prices have softened and reached about $ 40 a barrel from a month ago high of over $45 a barrel. In March, the government had taken Parliamentary approval to raise special additional excise duty on petrol to Rs 18 per litre and on diesel to Rs 12 per litre but did not change the levy then. In May, it raised special additional excise to Rs 12 on petrol and to Rs 9 on diesel. This leaves the government with the space to increase excise duty on petrol by a further Rs 6 per litre and on diesels by Rs 3 per litre. This option is being examined now. For consumers, any further increase in duty should not impact much as retail prices may be left unchanged or marginally increased as lower oil prices would allow for absorbing any increase in price. However, a further increase in taxes on fuel would make the product most taxed globally. The current taxes account for close to 70 per cent of the price of petrol and diesel. With any further increase in duty, this could reach 75-80 per cent level. Higher retail price is not an option for the government at this juncture as it could push inflation. With increased excise duty on petrol and diesel the government is already set to increase in oil revenue by close to Rs 1.75 lakh crore this year. This is in addition to over Rs 2 lakh crore it collects from petroleum products as annual excise revenue. Centres fiscal situation is stretched this year due to Covid-19 related disruptions and additional commitments to states over GST compensation shortfall. The fiscal deficit is already estimated at a high of 8 per cent of GDP for FY21.
Gas and tensions in the eastern Med
The discovery in recent years of huge natural gas reserves in the eastern Mediterranean has whetted the appetite of nearby countries but exacerbated geopolitical tensions between Turkey and its neighbours. Relations have been strained in recent months following Turkish exploration and drilling operations in waters claimed by both Cyprus and Greece. Here is the latest on these so-called “blue gold” reserves. – Cypriot fields – Cyprus, which has aspirations of becoming a major energy player in the region, has a key exclusive economic zone (EEZ), divided into 12 blocks and potentially rich in gas. Last November, it signed its first operating license with three Energy heavyweights, Noble Energy, Shell and Delek. The deals, which last 25 years, allow operations at the Aphrodite gas field, discovered in block 12 south of the island in 2011. Aphrodite’s reserves are estimated at 127.4 billion cubic meters (m3) of gas. In return, Nicosia is expected to earn revenues estimated at $9.3 billion over 18 years, according to calculations by its energy ministry. Italian firm ENI and France’s Total are also mounting exploration activities further west, particularly in block 6 at a site called Calypso, which could contain between 170 and 225 billion m3 of gas. Meanwhile further south in block 10, US giant ExxonMobil and Qatar Petroleum announced the discovery in 2019 of the Glaucus-1 field, which could house 130 billion m3 of gas. – Other fields – The East Mediterranean has been “an explorer’s paradise in the past decade with giant low-cost gas discoveries”, explained Aditya Saraswat and Pranav Joshi, analysts at Rystad Energy. In Israeli waters, local company Delek began exploiting the Leviathan field located 81 miles (130 kilometres) off the coast of Haifa in January 2020. Discovered a decade earlier, it is thought to contain 539 billion m3 of natural gas. The Tamar deposit — closer, at just 50 miles from Haifa — has been in operation since 2013 and its reserves are estimated at 238 billion m3. In addition, Israel has fields of smaller sizes, including Tanin and Karish. Neighbouring Egypt also has a gigantic offshore field, Zohr, discovered in August 2015 by ENI, which could house 850 billion m3. – Gas pipeline – To transport this abundance of gas to the rest of Europe, and help meet its aim of reducing energy dependence on Russia, Cyprus, Greece and Israel struck an agreement in December 2018 to build a gas pipeline, called East Med. This 1367-mile pipeline is set to pass 106 miles south of Cyprus and end in Otranto, in southern Italy after crossing the Greek island of Crete and mainland Greece. The cost of its construction is estimated at $7 billion and it should be able to transport 20 billion m3 of natural gas annually. However, building the pipeline is still several years away and it would not be operational until 2025 at the earliest. In the meantime regional tensions abound, with Greece accusing Turkey of violating international maritime law by prospecting in its waters. Ankara maintains that it has the right to conduct energy research, arguing small Greek islands near its coast do not preclude it from exploring the vast waters of the eastern Med. It dispatched a gas exploration vessel there in August, but after provoking a storm of regional controversy withdrew it shortly before a European summit in early October. Turkey also maintains a fraught relationship with its Cypriot neighbour, decades after its 1994 invasion of the northern part of the island in response to a coup by Greek Cypriots wishing to unify with Greece. Formal discussions on reunification have stalled since 2017. Israel’s turbulent relations with its neighbours add to regional tensions, including an ongoing dispute with Lebanon over an offshore zone. While the Jewish state has been exporting natural gas from the Leviathan and Tamar fields to Egypt since January, Jordan has passed a motion to ban Israeli gas imports, undermining a 2016 agreement allowing them.
Chevron bets on Middle East gas riches and reconciliation
After years of focusing on U.S. shale, Chevron Corp is staking its natural gas future on the Middle East, a volatile and divided region where energy majors have long tread warily. CEO Michael Wirth’s pivot away from home is underpinned by a bet that the Middle East is entering an era of reconciliation that will make it ideal for tapping natural gas, as demand for the cheaper and cleaner fuel is forecast to outstrip oil. The new strategy is seeing the company pitch new gas deals in Egypt, Israel, Qatar, while cutting spending on American shale exploration. The plan is anchored by Wirth’s $11.8 billion purchase this month of U.S.-based Noble Energy, which holds a stake of about 40% in the aptly-named Leviathan gas field in the Mediterranean Sea, off the coast of Israel. “Five years ago the Eastern Med wasn’t viewed as endowed from a resource standpoint as I think most people would say today. That’s a fundamental shift,” Wirth told Reuters in an interview. “There’s not a lot of capital investment required in the near term,” he said. “At a time when cash flow matters, that’s a very appealing attribute.” The deal brings an alliance with Israel that has been smoothed by the narrowing of some historical rifts in the region, such as the establishment of formal ties between Israel and the United Arab Emirates in an agreement signed last month. Wirth said Middle Eastern commercial and diplomatic relations “are becoming more codified and stronger, that’s a trend that we think augurs well for the region.” Chevron also made a courtesy call about the Noble deal to officials in Saudi Arabia, a key partner in several Chevron oil projects and a nation with historically strained relations with Israel, according to a senior source at the U.S. company. The Saudi government media communications office did not respond to a request for comment, while Chevron said it did not discuss details of meetings. RISKS AND RENEWABLES Yet the regional political and security risks that have deterred some companies in recent years still exist. Syria and Yemen are riven by wars, with uncertain consequences for a wider region where archrivals Saudi Arabia and Iran are waging a proxy battle. Just this January, the U.S. killing of Iranian general Qassem Soleimani in Iraq – and a reprisal by Tehran – illustrated the instability of the Middle East and threatened to engulf it in conflict. Despite such risks, Chevron – which at one point leap-frogged rival ExxonMobil this month to be the largest U.S. oil company by market value – is plowing ahead with efforts across the region. The Leviathan field and others nearby have the potential to become major factors in regional fuel supplies. Chevron could send gas to a Egyptian liquefied natural gas (LNG) plant that could ship the fuel to Europe or Asia, Wirth said. European and Asian nations have been moving toward gas, solar and wind, and away from coal and nuclear power. “The reality is you need gas in tandem with renewables,” said Christopher Kalnin, CEO of Banpu Kalnin Ventures, which invests in U.S. shale gas. Asia in particular will remain dependent on imported gas, he said, because it complements solar and wind. Global gas demand through 2025 is projected to rise 1.5% per year on average, largely on growing purchases by customers in China and India. In contrast, oil consumption may have already peaked at last year’s 100 million barrel per day (bpd) level, forecasters say, and this year could sink to 91.7 million bpd, a seven-year low. PERMIAN COST-CUTTING The Middle East produces a third of the world’s oil and one sixth of its natural gas, and has long drawn the interest of foreign oil companies. Chevron produces fewer barrels of oil and gas in the region than other majors, according to Rystad Energy data, but it is the only major to have had a continuous presence in Saudi Arabia for 70 years and has maintained good relations with governments in the region. “Chevron is extremely good at what I would call crown jewel government relations, big assets in challenging countries,” said Robin West, a board member of Spanish oil major Repsol SA and head of Boston Consulting Group’s Center for Energy Impact. “They very quietly work away at things.” The Noble deal fits Wirth’s effort to adapt to a low-cost energy world and expand in Qatar, Egypt and Iraq. It brought Chevron nearly 1 billion cubic feet of natural gas reserves, and ensures it remains among the world’s top 10 gas suppliers. “The size of the opportunity was way beyond the capacity of a company like Noble,” said a former Chevron executive who declined to be identified because of ongoing relationships. The purchase may help Chevron’s bid for a stake in Qatar’s LNG production expansion, where it is competing with Exxon, Shell and Total SA, among others. Chevron also recently signed a preliminary agreement for oil exploration in southern Iraq. Wirth cautioned that negotiations were ongoing: “There’s no certainty of outcome on either of those.” Wirth has, meanwhile, intensified his cost-cutting at home. Chevron has slashed its spending in the top U.S. shale field by half, to around $2 billion this year. It had just four active drilling rigs in the Permian Basin as of September, down from 16 in March, according to consultancy Rystad Energy.
Bangladesh scraps another LNG import tender over high prices
Bangladesh is cancelling another tender to import liquefied natural gas (LNG) in December, as it received one offer to supply the shipments that were too expensive, a senior energy ministry official said on Friday. The offer from the Asian unit of Vitol to supply 138,000 cubic metres of LNG for Dec. 9-10 delivery was more than $2 per unit higher than the prices that Bangladesh pays under long-term contracts, said Anisur Rahman, senior secretary to the Energy and Mineral Resources Division. State-run Rupantarita Prakritik Gas Company, which is in charge of LNG imports into the country, cancelled a tender for November delivery, citing the same reason. “From December, we have a plan to import two cargoes of LNG from the spot markets each month,” Rahman said, adding that both the tenders would be reissued. Under its long-term deals with Oman Trading International and Qatar gas, Bangladesh pays about $5.50 to $6 per million British thermal units (mmBtu). Rupantarita bought Bangladesh’s first spot LNG cargo ever from Vitol at $3.8321 per mmBtu for delivery over late September to early October. However, prices for spot cargoes, or shipments typically for next month delivery, are gaining on expectations that colder weather during the Northern Hemisphere winter will increase LNG demand for heating. Spot LNG prices for Asia were estimated at $5.80 per mmBtu as of last Friday, their highest in more than 11 months. Bangladesh, with a population of about 160 million people, is set to become a major LNG importer in Asia as domestic gas supplies fall. The country currently has two floating storage and regasification units with a total regasification capacity of 1 billion cubic feet per day, equal to about 7.5 million tonnes a year.
Essar Group to pump Rs 35,000 crore into Gujarat
After exiting two of its most prized assets in Gujarat — the refinery and steel facilities, the Ruias-controlled Essar group is once again exploring the state for several big-ticket projects. These include setting up a commercial port, new and emerging technologies, EV vehicles and lithium-ion manufacturing facility, renewable energy, petrochemicals and even a steel project. The company has drawn out plans to invest about $5 billion (roughly Rs 35,000 crore) for a steel manufacturing project in Gujarat, said sources close to the development. The promoters of Essar Group had last year lost a long-draw the battle to wrest control of the bankruptcy-ridden Essar Steel at Hazira which it had built from a scratch. The stressed steel plant project of 10 million tonnes per annum capacity went into insolvency proceedings and was bagged by ArcelorMittal Nippon Steel India Ltd. Senior executives of Essar Group met top Gujarat government officials last week to discuss various plans. The company has also submitted a proposal to set up a steel plant with 8 million tonnes of annual capacity for which it has sought land from the state government. “The company is looking for land near coastal areas that have good port connectivity,” said a senior state government official. For the proposed steel plant the company requires land of about 1,000 hectares, said sources in the know of the development. The $5 billion proposal does not include land and infrastructure cost of a captive port and captive power plant, said sources. The ArcelorMittal led joint venture’s winning bid involved a debt restructuring plan to the tune of Rs 42,000 crore and further investment of Rs 8,000 crore for ramping up its capacity. Essar group promoters had proposed to repay about Rs 55,000 crore to the creditors however the offer was not accepted by the committee of creditors for Essar Steel. Essar group and ArcelorMittal are presently locked in a legal battle to wrest control of the captive port at the steel plant facility at Hazira. When contacted, an Essar group spokesperson said that senior executives have been visiting senior government officials to discuss their current investments in ports and power sector in Gujarat. Essar Group has also proposed to set up an LNG terminal at Hazira and also drawn out plans to enter into solar and wind energy generation and coal bed methane projects in Gujarat, said sources. For the port project, the group has chalked out plans to invest about Rs 10,000 crore, according to sources. The Essar group promoters, who sold the refinery project near Jamnagar for $12.9 billion to Russia’s Rosneft led consortium, is also planning to set up a petrochemical complex. For this the group is looking at options within India, including Gujarat and also overseas, said sources. Last year in October, Essar group promoters said that they paid off Rs 1.4 lakh crore debt and that the residual 10-15% would be cleared shortly. Essar group took steps towards reducing leverage by exiting from Essar Oil and selling it off to Rosneft-Trafigura consortium in 2017. This was followed by the company’s exit from Aegis, their BPO business. The group carried out a few more exits and used the proceeds from this monetisation, exercise to repay about Rs 1,40,000 crore of debt, which is seen as the largest deleveraging exercise by an Indian corporate. The company is in good shape with the top line of the portfolio the business of over $13 billion or Rs 1,00,000 crore, the group, director of Essar Capital said Prashant Ruia, in an internal message posted on the group’s website last October.
Russia’s Putin: rollover on oil output curbs possible
Russian President Vladimir Putin said on Thursday that Russia saw no need for now for global oil producers to change their existing deal on global supply, but did not rule out extending deep oil cuts for longer if market conditions warranted. His comments are the clearest signal yet from Russia, one of the world’s top oil producers, that it is ready to continue with unprecedented output cuts in the face of a sluggish oil market beset by the coronavirus pandemic and overproduction. Russia is working with OPEC and other oil producing allies, in a group called OPEC+, to limit oil supplies to drain a glut in the market caused when global demand slumped due to coronavirus lockdowns. The producers are reducing combined production by 7.7 million barrels per day (bpd). OPEC+ is scheduled to relax those cuts by 2 million bpd in January, although some producers are concerned demand may not be strong enough to absorb the additional supply. Putin said on Thursday he had been in contact with Saudi Arabia, OPEC’s top producer, as well as the United States. The United States is not part of the OPEC+ group. “We believe there is no need to change anything in our agreements, we will closely watch how the market is recovering. Consumption is on the rise. “However, we do not rule out that we could keep existing restrictions on production, and not remove them as quickly as we had planned to do earlier,” Putin told a meeting of the Valdai Discussion Club. “If need be, maybe, we can take other decisions on further reductions. But we don’t see such a necessity now,” he added. Russian Energy Minister Alexander Novak said earlier this week the global oil market recovery had slowed due to the second wave of the coronavirus outbreak, while it was premature to discuss a possible output-cuts rollover into 2021. Industry sources told Reuters that Russia may support the move to extend the existing cuts beyond December. OPEC+ oil ministers are scheduled to hold an online conference on Dec. 1 to discuss supply policy. “Russia is interested neither in an (oil) prices jump, nor in their fall. And in that case, our interests coincide with that of the American partners,” Putin said.
France halts Engie’s U.S. LNG deal amid trade, environment disputes
The French government asked power group Engie to hold off on signing a multibillion-dollar U.S. liquefied natural gas import contract on concerns over the deal’s environmental implications, a source familiar with the matter said. The intervention comes amid growing scrutiny over the effects of shale gas extraction methods such as fracking and their impact on climate change through methane emissions, especially among U.S. producers. However, it also comes against a backdrop of broader trade disputes between Europe and the United States, with Paris and Washington engaging in retaliatory measures over plans to tax big digital companies, for instance. Engie’s contract would be with NextDecade Corp, which is due to decide whether to go ahead with plans to build its proposed Rio Grande LNG export plant in Texas as it tots up agreements with prospective customers. The project was “not aligned with France’s environmental project and environmental vision,” the source said, adding that the request had come from the economy ministry. Jessica Szymanski, a spokeswoman at the U.S. Department of Energy, which has touted LNG exports, said it would be “short-sighted and narrow-minded to delay LNG projects for political posturing.” Such a move “threatens to hinder the environmental progress we’ve made using American natural gas.” Looking ahead, however, analysts said a victory by Democratic presidential candidate Joe Biden in the Nov. 3 U.S. election would increase the odds of a deal between Engie and NextDecade. Biden, should he win, is expected to bring tough new regulations on energy industry emissions, which might ease concerns of French regulators and others. A spokeswoman for Engie, which is part-owned by the French state, said the company’s board decided on Sept. 30 to give itself more time to study the NextDecade contract, saying “the project required a more detailed examination.” But she declined to comment on whether this followed a request from the state, while the French government had no immediate comment. Politico and French newsletter La Lettre A earlier reported that the state had intervened on the 20-year deal, which they said was worth $7 billion. NextDecade said it could not discuss details of its commercial dealings, and added that the firm was working on measures to target carbon-neutrality at Rio Grande. The company is grappling with concerns about the polluting effect of the natural gas provided to LNG processors by producers in Texas and elsewhere, and recently announced it had developed processes to reduce Rio Grande’s carbon dioxide equivalent emissions. NextDecade has put off its final investment decision (FID) on Rio Grande from this year to 2021, after government lockdowns to stop the spread of COVID-19 cut global demand for gas. TRADE TUSSLES French and U.S. environmental campaigners welcomed the delay in Engie’s contract, though Lorette Philippot, of French activist group Amis de la Terre (Friends of the Earth), said she hoped this would lead to the deal never materialising. “France must have zero tolerance when it comes to shale gas,” Philippot said. The French government said earlier in October it would stop providing state export guarantees to projects involving more polluting forms of oil such as shale from next year, followed by all types of oil from 2025 and gas from 2035. Rebekah Hinojosa from the Sierra Club, a U.S.-based environmental group, said the setback for NextDecade should add to reasons not to build the facility. But analysts at Height Capital Markets in Washington said the French state’s intervention may have been motivated by broader trade tensions that could ease if Biden wins. “We believe a Biden victory would increase the odds that Engie signs the deal,” the analysts said, adding Biden would likely work to reduce trade tensions. The market seems to agree. NextDecade shares were up 7.5% at $2.80 on Thursday afternoon despite seemingly negative news. The European Union is the world’s biggest gas import market and the United States is vying for market share with cheaper pipeline gas from Russia, which has also led to tensions. Engie, alongside other European energy firms, is one of the financial backers of the Nord Stream oil pipeline project which is led by Russian oil company Gazprom. The United States has imposed sanctions on Nord Stream accusing Moscow of using its energy resources “for coercive purposes.” The Kremlin accuses Washington of using the sanctions for unfair competition to promote pricier U.S. LNG.
India’s newest LNG terminal at Mundra nears 50 per cent capacity utilization
At a time when some of the LNG re-gasification projects including the Dabhol (Maharashtra) and Kochi (Kerala) terminals are struggling for optimum capacity utilization despite being up and running for more than five years now, the brand new Mundra LNG terminal in Gujarat, is operating at about 45 per cent capacity due to spurt in demand. The prices of gas in the international markets have been on a constant decline amid the Covid-19 crisis. The Gujarat government-backed GSPC LNG project at Mundra, which is co-promoted by the Adani Group, began commercial operations in February this year with 5 million tonnes per annum (MTPA) installed capacity and built at a cost of about Rs 5,000 crore. “This is the fastest ramp up of an LNG terminal in the country since Dahej (phase-1) in 2004 which had the first mover advantage. Currently, the Mundra LNG terminal is operating at a throughput more than the throughput of the three LNG terminals (Kochi, Ennore and Dabhol) that came up in the last eight years,” said Sanjeev Kumar, managing director of GSPC. The Mundra terminal is facing pipeline capacity restraint that restricts it from further ramping up the capacity. The pipeline has a carrying capacity to cater to 5MTPA of gas transportation from Mundra to Anjar. But, further down from Mehsana to Bhatinda, the pipeline can cater to only 7.5 million metric standard cubic meters per day (mmscmd) or about 2MTPA volume of gas. GSPC aims to set up a compressor near Ghana village in Kutch that will allow it to add throughput capacity of another 1.5mmscmd in the next few months, according to Kumar. By the end of this financial year, the Mundra LNG terminal will have achieved a throughput of 50 per cent or about 2.5MTPA of the total installed capacity, he added. The Mundra terminal was inaugurated by Prime Minister Narendra Modi in 2018 however it was only earlier this year that it received its commissioning cargo. India’s LNG import for September was 2,972 million metric standard cubic metres which was 6.2 per cent higher than the corresponding month of the previous year, according to a September report by Petroleum Planning and Analysis Cell, ministry of petroleum and natural gas. Mundra LNG terminal has already handled 20 cargoes, that too delivered by 19 different LNG ships including large sized Q flex carriers. The gas prices that were hovering around USD 5-6 per MMBTU last year fell to an all-time low of USD 2 in the April to July period this year. GSPC has booked 11 LNG spot cargos from April to October period in the range of USD 2.25 per million British thermal unit (MBTU) to USD 3.5 per MMBTU, said sources. The gas from Mundra terminal is supplied to the ceramic hub of Morbi and other parts of Saurashtra by Gujarat Gas, another state government-owned entity. Apart from households and industrial units, the gas from Mundra is supplied to GSPC Pipavav Power Company. The 700MW power plant produced only 62 million units in the April to July period last year which has increased to 1,610 million units in the same period this year, according to Central Electricity Authority data.
Exxon Mobil ‘very close’ to disclosing US, Canada job cuts, says CEO
Exxon Mobil Corp is “very close” to completing its workforce appraisals in the United States and Canada and expects to unveil job cuts, its chief executive told employees in an email on Wednesday. The second-largest US oil company by market value lost nearly $1.7 billion in the first six months and analysts forecast a third-quarter $1.17 billion loss, according to IBES data from Refinitiv. The job cuts are part of a plan unveiled this spring to redesign how Exxon works and to increase competitiveness, CEO Darren Woods said in an email to its nearly 75,000-person workforce. Exxon has exceeded a target of reducing operating expenses by $1 billion and capital budget spending by $10 billion, he wrote. But the COVID-19 pandemic has cut oil demand by about 20%, he said, delivering a “devastating impact” on the oil business. Woods told employees that “we are very close” to completing the jobs review and that they could expect details soon after the company’s board of directors is briefed. “I wish I could say we were finished, but we are not. We still have some significant headwinds, more work to do and, unfortunately, further reductions are necessary,” he said in the email. Exxon was slower than rivals to react to this year’s oil price decline and borrowed $23 billion to shore up a balance sheet strained by the losses and a nearly $15 billion annual dividend payment to shareholders. Royal Dutch Shell and BP have outlined up to 15% workforce cuts while Chevron has asked employees to reapply for their jobs. Woods said the demand loss is five times the decline of the 2008 financial crisis, but “industry under-investment today will increase the need for our products in the near future.” All oil companies face the same loss of demand, but Exxon has the burden of promising to keep its huge dividend without adding new debt, said Raymond James analyst Pavel Molchanov. US oil prices must rise another $10 a barrel to cover the payout without borrowing, he estimates. “If management has to walk back their pledge” not to issue new debt to protect the dividend, “it would damage credibility,” Molchanov said. Exxon’s dividend yield, the percent of the share price paid annually to holders, was 10.3%, the largest among major oil companies and another sign of Exxon’s weak finances. Its shares fell 1.6% to $33.14 on Wednesday as oil prices declined on worries that the COVID-19 infections are on the rise globally. The stock is trading near a 18-year low.
ONGC wins 7 oil blocks, OIL 4 in latest bid round
State-owned Oil and Natural Gas Corp (ONGC) has won seven out of the 11 oil and gas exploration blocks offered for bidding in the latest licensing round, upstream regulator Directorate General of Hydrocarbons (DGH) said Thursday. Oil India Ltd (OIL) won the remaining four blocks, it said. The government had offered 11 blocks for exploration and production of oil and gas in the fifth bid round under the Open Acreage Licensing Policy (OLAP). A total of 12 bids — seven bids by Oil and Natural Gas Corp (ONGC) and four by Oil India Ltd (OIL) — were received for the 11 blocks on offer at the close of bidding on June 30. Invenire Petrodyne Ltd was the only private bidder for one block. While ONGC was the sole bidder for six blocks, OIL was the lone bidder in all the four blocks it bid for. ONGC won all six blocks where it was the sole bidder and also the one block where Invenire Petrodyne had bid. The previous bid round, OALP-IV, too had seen just eight bids coming in for seven blocks on offer. ONGC had walked away with all the seven oil and gas blocks on offer. Prior to OALP-V, the government had awarded 94 blocks in four OALP bid rounds in the last two and a half years. These 94 blocks cover an exploratory area of about 1,36,800 square kilometers over 16 Indian sedimentary basins. In the latest bid round, about 19,800 sq km of the area was offered for bidding, according to DGH. OALP-IV was the first round on revamped terms approved in February 2019. Unlike previous rounds, where blocks were awarded to companies offering a maximum share of oil and gas to the government, blocks in little or unexplored Category-II and III basins are now awarded to companies offering to do maximum exploration programme. The 11 blocks under OALP-V are spread across eight sedimentary basins and include eight on land blocks (six in Category-I basin and one each in Category II and III basins), two shallow-water blocks (one each in Category-I and II basins) and one ultra-deepwater block (Category-I basin). At the time of the launch of OALP-V, DGH had stated that the round is expected to “generate immediate exploration work commitment of around USD 400-450 million”. “An area of 1,36,800 sq km has already been awarded under OALP bid round I, II, III, and IV. These OALP bid round-V blocks would add a further 19,800 sq km. Overall exploration acreage of India would then increase to 2,36,600 sq km,” it had said at that time. Of the 94 blocks awarded in the first four rounds of OALP, Vedanta has won the maximum at 51. Oil India Ltd has got 21 blocks and ONGC another 17. After OALP-V, ONGC’s tally has gone up to 24 and that of OIL to 25. Under OALP, companies are allowed to carve out areas they want to explore oil and gas in. Companies can put in an expression of interest (EoI) for any area throughout the year, but such interests are accumulated thrice in a year. The areas sought are then put on auction.