Much optimism on gas demand; consumption to zoom in the near term
One more terminal for import of liquefied natural gas (LNG) was inaugurated last week. At first glance, one wonders why. For, the country’s demand is currently far behind the capacity to supply. Pipeline utilisation of state-run GAIL India is a mere 40-45 per cent; it is having a problem finding further markets for imported LNG. “A majority of gas-based power plants have got stranded. Between 50 to 60 per cent of the LNG we have contracted from the United States will be sold outside or swapped due to demand shortage,” said a GAIL official, asking for anonymity. Of the 25,329 Mw total of gas-based power plants’ capacity in the country, at least 14,000 Mw is reportedly stranded. Despite this, at least 10 more LNG projects are to come up, with four already operational. Taking the total capacity of terminals to around 72.5 million tons per annum (mtpa). According to a report by the Petroleum Planning and Analysis Cell of the government, against a projected consumption of natural gas of 494 million standard cubic metres a day (mscmd) for 2017-18, the consumption was 144.75 mscmd. Even so, import of LNG rose 6.6 per cent over the previous year. India is now the world’s fourth largest LNG importer. Demand optimism A four-mt Floating Storage Re-gasification Unit-based LNG terminal by H-Energy Gateway (energy venture of the Hiranandani Group) was launched last week at the JSW Jaigarh Port in Ratnagiri district of Maharashtra. The terminal is likely to be operational by the fourth quarter of 2018. “We have 100 districts in India where city gas licenses have been awarded. This June, of the 670 districts in India, another 100 will be awarded. So, demand will double. Total (annual) consumption of gas is now 40 mt and we think it will move to at least 80 mt in the next five to six years. Half of it comes from domestic sources. So, 22 mt we import and 20 mt we produce domestically,” said Darshan Hiranandani, managing director of H-Energy. He adds that all mega terminals might not but all small-scale terminals would do good business. A rise in demand is expected from power, city gas, fertiliser and industrial consumers. According to Petronet LNG, the country’s demand is set to increase by 82 per cent to 654 mscmd by 2026-27. Demand from city gas is set to zoom from 22 mscmd in 2016-17 to 68 mscmd by 2026-27. And, power sector from 157 mscmd to 309 mscmd during the period. “We expect a rise in demand post 2020 and are already in talks with refineries, power plants and petrochemical units near our planned and existing pipelines,” the GAIL official added. India is set to bring its first LNG cargo from Gazprom in May, after the Russian company and GAIL agreed to bring down prices, based on a new formula agreed this January. The company also plans to bring at least 80 cargoes of LNG from America in this financial year. GAIL has already signed a $32-billion supply deal for 20 years with the Dominion Energy Cove Point project in Maryland and Cheniere Energy’s Sabine Pass project in Louisiana. Jurrell Casey Womens Jersey
ONGC clocks 6.3% rise in gas production
ONGC registered 6.3 per cent increase in natural gas production in 2017-18 and is on track to double the output by 2022, a top company official said. It produced 23.484 billion cubic meters of gas in 2017-18 as against 22.088 bcm in 2016-17, he said. This is the highest gas output by Oil and Natural Gas Corp in five years and the growth rate is higher than the global average of 3-4 per cent year-on-year. ONGC has stepped up on bringing newer fields into production after Prime Minister Narendra Modi set a stiff target of reducing oil import dependence by 10 per cent by 2022. India currently imports over 80 per cent of its oil needs. The overall gas production, which includes production from the joint ventures, registered a growth of 5.8 per cent at 24.610 bcm, as against 23.270 bcm in the previous year. “This is the highest ever overall growth in percentage terms since 2001-02,” he said. The company is targeting gas production of 24.41 bcm during the current financial year and incur an investment of around Rs 70 billion. While the main incremental growth stand-alone basis came from western offshore, the onshore fields have also contributed substantially despite natural decline coupled with several other constraints. During the last financial year, ONGC’s offshore gas production stood at 17.845 bcm against 16.883 bcm produced in 2016-17. The onshore registered a production of 5639 bcm gas in the last fiscal year against the production of 5.205 in the previous fiscal. The growth in output was largely contributed by C-26 Cluster fields, Daman and Vasai East fields in the western offshore as well as sub-sea well S2AB in the eastern offshore, he said. From the onshore fields, there has been an increase in production particularly from Ramnad area in Cauvery Asset. There has also been a considerable increase in associated gas production from Ankleshwar and Assam Assets. When reached for comments, ONGC Chairman and Managing Director Shashi Shanker said the company has been aggressively pursuing the gas production growth in line with the government’s drive for cleaner gas economy. He said the company has charted out a mission to double the gas production at 42.7 bcm by 2021-22. “The production growth last year is only a testimony to that goal,” he said, adding the company was on track to meet the target. The total investment in the ONGC’s ambitious gas projects stands at Rs 570 billion, which is one of the highest investments in the world as far as the gas projects are concerned. This investment includes the high potential KG-DWN-98/2 project which is being implemented on a fast track basis. First gas from the project is targeted for 2019. The job for the early monetisation of discoveries both from the west and the east coast has been rigorously monitored at the highest level in order to ensure that the company’s ambitious gas production goal is achieved on schedule, Shanker said. The official said ONGC has drastically reduced gas flaring during the last fiscal, leading to considerable savings. The gas flaring stood at 1.92 per cent in 2017-18, lowest since 1999-2000. This is only technical flaring and due to non-availability of customers like in the previous years. Derek Newton Jersey
Ambani’s EWPL seeks tripling of KG gas transportation tariff
Billionaire Mukesh Ambani-led East-West Pipeline Ltd has sought nearly tripling of the tariff it charges for transporting KG gas from east coast to Gujarat. Downstream oil regulator PNGRB today floated a public consultation paper on EWPL, earlier known as Reliance Gas Transportation Infrastructure Ltd (RGTIL), seeking a rise in pipeline tariff from Rs 52.23 per million British thermal unit charged till 2017 to Rs 151.84 per mmBtu for 2018-19 to 2035-36. A rise in tariff would lead to increase in the price of electricity and fertiliser as well as city gas like CNG. “EWPL in its updated tariff filing for determination of final tariff has submitted the capital expenditure of East-West pipeline excluding interest during construction (IDC) as Rs 187.3671 billion,” PNGRB said in the consultation paper. This includes Rs 162.2730 billion of actual cape on building of the 1,460-km pipeline and another Rs 7 billion capex towards additional connectivity and Rs 18.0941 billion for maintenance and replacement. The pipeline primarily transports KG-D6 gas, which has steadily dipped from 69.43 million standard cubic metres per day achieved in March 2010 to just 4.3 mmscmd in January-March quarter. Originally, EWPL had proposed a levelised tariff of Rs 55.91 per mmBtu for transporting Reliance Industries’ eastern offshore KG-D6 gas from Kakinada in Andhra Pradesh to Bharuch in Gujarat beginning April 1, 2009. However, the Petroleum and Natural Gas Regulatory Board (PNGRB) fixed a provisional tariff at Rs 52.23 per mmBtu. The company on October 27 last year proposed a final tariff for the pipeline at Rs 78.72 effective from April 1, 2009, till the end of economic life of the pipeline — up to March 31, 2034. When PNGRB sought clarifications, EWPL updated the tariff filing to state that Rs 52.23 per mmBtu would be the tariff till 2017 and Rs 151.84 would be charged from 2018-19 to 2035-36, the regulator said in the notice. PNGRB said as the length of the pipeline is more than 300 kms, zonal tariffs — lower charge for zones near the origin of the pipeline and higher rates as the gas transverses away, will be fixed. PNGRB said when it first fixed the provisional tariff, it had assessed the pipeline’s carrying capacity of 85 million standard cubic metres per day including 21.25 mmscmd for use on a common carrier, open access and non-discriminatory basis by any third party. But the company challenged this first before the Appellate Tribunal of Electricity (APTEL) and then before the Delhi High Court. The Court had in April last year ordered fixing of the tariff once the quorum of PNGRB was complete. PNGRB became fully functional a couple of months back when the government made appointments of Chairman and members of the Board. PNGRB sought views of stakeholders on EWPL’s tariff filing within 15 days. Tomas Nosek Authentic Jersey
Arbitration hearings begin in Cairn India’s challenge to Rs 205 billion tax demand
Hearings have begun on the arbitration challenge mounted by mining billionaire Anil Agarwal-led Cairn India against a Rs 205 billion retrospective tax demand and a final order is expected in next few months, sources privy to the development said. The tax department had in January 2014 slapped a tax demand of Rs 102.47 billion on British oil explorer Cairn Energy plc for alleged capital gains it made on a 2006 internal reorganisation that saw the Indian business being transferred to a new firm, Cairn India Ltd which was subsequently listed. In March 2015, it also slapped a notice on Cairn India, which was in 2011 acquired by Agarwal’s Vedanta Group, for its failure to withhold tax on capital gains made by its erstwhile parent, Cairn Energy. Cairn India was subsequently merged into Vedanta Ltd. It is now called Vedanta Ltd. Cairn Energy had challenged the tax demand through an international arbitration and the sources said that the final hearing in that case is scheduled for August. Separately, Vedanta-controlled Cairn India too challenged the order through a different arbitration notice in March 2015. It used the UK-India bilateral investment treaty to challenge the tax notice. The sources said the Indian government challenged the invoking of the arbitration on a tax matter under the bilateral investment treaty. The three-member International Arbitration Tribunal in an order on December 28 last year held that Vedanta Ltd is an investor eligible for arbitration, they said, adding that hearing on merits of the matter began on April 29 and are likely to be concluded by May 10. Sources said the Government of India has challenged the December order of the arbitration tribunal in the High Court of Singapore. In the March 11, 2015 notice, the tax department alleged that Cairn India had failed to withhold tax on the consideration paid to Cairn UK Holdings Ltd (CUHL), a subsidiary of Cairn Energy plc, on transfer of shares to Cairn India as part of group reorganisation during 2006-07 financial year. It cited the 2012 amendments that gave tax departments powers to retrospectively tax such deals, to demand Rs 204.947 billion. This comprised of tax of Rs 102.474 billion and interest of an equivalent amount. The tax department had in the order stated that a short term capital gain of Rs 245.0350 billion accrued to CUHL on transfer of the shares to Cairn India (now called Vedanta Ltd), on which tax should have been withheld. Sources said Vedanta believes that there could be no liability on it as it could not have anticipated in 2006-07 that a law would be brought subsequently that would require withholding tax on such transactions. Vedanta had also challenged the tax demand in the Delhi High Court and the next hearing is scheduled for July 6. It had also filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) confirmed the tax demand and interest against Cairn India, which was subsequently challenged before the Income Tax Appellate Tribunal. The next hearing date is not yet fixed. Derek Holland Womens Jersey
India’s refining capacity rose 5.8 per cent last fiscal on Jamnagar and Kochi expansion
India’s refining capacity rose 5.8 percent last financial year to 247.6 Million Tonne Per Annum (MMTPA) mainly on the back of capacity expansion at Jamnagar refinery operated by Reliance Industries (RIL) in Gujarat and Kochi refinery operated by Bharat Petroleum (BPCL). Jamnagar refinery capacity expanded by 8 million tonnes per annum (MTPA) while Kochi’s capacity increased by 3 MTA during the year. The overall 5.8 percent growth in the country’s refining capacity took place due to the growth of 3.5 percent in Public Sector Undertakings or Joint Venture refineries and 10.2 percent in private refineries, the oil ministry said in its latest report. RIL increased Jamnagar (SEZ) refinery’s capacity to 35.2 MTPA in the financial year 2017-2018 from 27 MTPA in the financial year 2016-2017. The company had said in its financial results statement earlier this week its crude throughput in 2017-18 decreased marginally to 69.8 Million Tonne (MT) from 70.1 MT in 2016-2017. “4Q FY18 revenue from the Refining & Marketing segment increased by 29.8% Y-o-Y to Rs 93,519 crore ($ 14.3 billion) led by 24.2 percent YoY higher crude oil prices during the quarter. Segment EBIT declined by 10.9 percent Y-o-Y to Rs 5,607 crore ($ 860 million), largely on account of reduced crude throughput and adverse move in Brent-Dubai differentials,” RIL said. The company added that the strong performance driven by Petrochemicals, Retail, and Digital Service businesses was partially offset by the reduced contribution from refining due to lower crude throughput as well as lower volumes in upstream oil and gas. The oil ministry’s report shows Jamnagar refinery’s capacity utilization dropped to 106.02 percent in 2017-18 as compared to 138.34 percent recorded in the previous fiscal. The company’s overall capacity utilization dropped to 103.33 percent from 116.96 percent in 2016-2017. The Kochi refinery in Kerala operated completed its Rs 16,500 crore Integrated Refinery Expansion Project (IREP) last financial year to become the largest public sector refinery in the country, surpassing the capacity of 15 MTPA Paradip refinery and 15 MTPA Panipat refinery operated by Indian Oil Corporation (IOC). The Kochi refinery increased its installed capacity to 15.5 MTPA in the financial year 2017-2018 from 9.5 MTPA in the year-ago period. Bhatinda refinery, a JV between Hindustan Petroleum and Mittal Energy Investments Pvt Ltd, expanded its capacity to 11.3 MTPA in 2017-18 from 9 MTPA in 2016-17 as part of a $350 million expansion plan. Dorian O’Daniel Jersey
Mitsubishi and IOC sign an agreement over the licensing for manufacturing Acrylic Acid and Acrylic Acid Ester in India
Mitsubishi Chemical Corporation (MCC), headquartered at Chiyoda Ward, Tokyo and Indian Oil Corporation Limited (IOC) have concluded an agreement over the licensing of MCC’s proprietary technology for manufacturing acrylic acid and acrylic acid ester. Indian Oil Corporation Limited, the country’s largest oil and gas company, has been working on a project for producing petrochemicals from propylene in Dumad, India. Indian Oil Company has selected MCC’s technology for the process of manufacturing acrylic acid with an annual capacity of 90,000 tons and butyl acrylate with an annual capacity of 150,000 tons in the project. Beginning in the year 1962, MCC launched the development of a process for producing acrylic acid and acrylic acid ester from propylene and built the first commercial plant based on the process at the Yokkaichi in 1973. The plant is continuing to operate to date. More than ten plants have been using the licensing process in the world. Disposable diapers, coating compositions, and adhesive agents use acrylic acid and acrylic acid ester. Global demand for these acid chemicals is on the rise at an annual rate of more than 5%. MCC will actively promote licensing activity to new projects resulting from the growing global demand for petrochemicals. MCC, founded in 1933, is an international chemical company of repute to produce performance products, industrial materials, and others. During the year 2016, the company had sales revenues of JPY 2,390.9 billion. Indian Oil is India’s flagship Maharana national oil company with business interests straddling the entire hydrocarbon value chain – from refining, pipeline transportation and marketing of petroleum products to Research & Development, Exploration & Production, marketing of natural gas and petrochemicals. Travis Konecny Jersey
India offered a $1.6bn oil discount, if it pays in crypto
Venezuela’s inflation could hit 100,000% by 2019 and they desperately need cash. Is the Petro the last roll of the monetary dice for President Maduro? It’s not difficult to understand why Nicolas Maduro is trying very hard to sell his Petro crypto coin. Launched in late 2017 with the aim of circumventing US trade sanctions while also attempting to ease the pressure on the ever-sliding Bolivar – Venezuela’s inflation rate rose from 4,000% last year to 18,000 % in April and some economists say it could hit 100,000 % by the end of the year – the Petro could be the last roll of the monetary dice for President Maduro. He claims the token, that supposedly is backed by the country’s oil assets, raised $5 billion after it went on public sale in March and, while domestically opposition politicians argue that is illegal and many in the crypto industry have said it is a national-level scam, Maduro seems to be doing all he can to use it to turn some quick profit. According to local news outlet Correo del Orinoco, the Venezuelan president has pushed the country’s financial authorities to register 16 new crypto exchanges and the aim is clear. Make it easier for the country’s citizens to purchase the world’s first state-backed crypto-currency. Maduro also seems to be extending the government’s crypto platform and, via an April 27 announcement, he reportedly told the Venezuelan people they could now invest in the country’s gold, via a Central Bank of Venezuela crypto-based “‘petro oro” initiative. Now news has emerged that Venezuela, the world’s second-largest crude oil producer, has tried to cut a deal with India, according to Quartz, by offering a 30% discount on petroleum sales if, yes you’ve guessed, payments are made using the Petro. Quartz says that India imported something like 8% of its oil needs from Venezuela in 2017, which would have cost $5.5 billion. So a 30% discount? That’s close to $1.6 billion. Temping indeed but … Delhi has just done a lot to try to squash trade in crypto-currencies. Earlier this month the Reserve Bank of India announced new measures banning banks under its control from investing in crypto-currency markets. This came after finance minister Arun Jaitley last year called cryptos “Ponzi schemes which can result in sudden and prolonged crash exposing investors.” In February he added to his criticism by telling Indian lawmakers to “take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.” Presumably, that would include purchasing oil worth $5 billion? The Reserve Bank of India might be now studying the feasibility of an Indian state digital currency but it is also far from supportive of the wider international crypto landscape. “Internationally, while the regulatory response to these tokens are not uniform, it is universally felt that they can seriously undermine the anti-money laundering … framework, adversely impact the market integrity and capital control,” said the bank earlier this month. What a dilemma to have. Make a quick $1.6 billion? Or stick to your principles. Can India dare go down Maduro’s crypto rabbit hole? Is this Delhi’s red pill, blue pill moment? So, what would you do? Dominic Moore Womens Jersey
ONGC shortlists Schlumberger, Halliburton, Baker for boosting output at 2 oilfields
Oil and Natural Gas Corp (ONGC) will hire international oil service companies for the first time to raise output from mature oilfields. India’s top oil and gas producer has shortlisted Schlumberger, Halliburton and GE subsidiary Baker Hughes for raising output from Kalol field in Gujarat and Geleki field in Assam, according to tender document floated by the company. Other oilfield service providers meeting pre-qualification criteria can also bid for the job by May 25, it said. The service providers will be paid a fee for raising output beyond an agreed baseline production. “To achieve the objective of production enhancement of oil and gas from mature fields, ONGC invites global oil and gas service providers having firm commitment to invest and processing capabilities to bid,” the document said. “The service provider will be required to invest in capital expenditure and operating expenditure to increase production from the existing ‘baseline’ production.” ONGC is looking to raise domestic output quickly to meet Prime Minister Narendra Modi’s target of cutting import dependence by 10 percent by 2022. India currently imports over 80 percent of its oil needs. Originally, ONGC had on December 7, 2016, signed a Summary of Understanding (SoU) to give Kalol field to Halliburton and Geleki field to Schlumberger for raising production above the current baseline output. Though the contracts were signed in presence of Oil Minister Dharmendra Pradhan, ONGC rescinded them last year on fears of courting controversy for handing fields on nomination basis. Thereafter, the company in June 2017 floated an expression of interest (EoI) from service providers for undertaking production enhancement. “Following are the names of vendors meeting the pre-qualification criteria (of EoI): Schlumberger Asia Services, Halliburton Offshore Services Inc, and Baker Hughes Singapore PTE Ltd,” the firm said in the document seeking final bids by May 25. The 15-year Production Enhancement Contract (PEC) will require the oilfield service producer to commit to investing in capital expenditure and operating expenditure to increase production from the existing ‘baseline’ output. A tariff will be paid in USD per barrel of oil and USD per million British thermal unit for gas for any incremental hydrocarbon produced and saved over the baseline. The baseline shall be prepared by ONGC and vetted and certified by a third party of international repute. All the oil and gas produced will belong to ONGC and the service provider arrangement is being entered into to get the best technology available, sources said. Besides Schlumberger, Halliburton and Baker Hughes, ONGC was also in talks with Weatherford International. Sources said based on the experience of Kalol and Geleki, the PEC model may be extended to other onshore fields. David Bakhtiari Authentic Jersey
Is India’s oil addiction undermining its economy once more?
From about the beginning of 2017, even skeptics had to admit, India looked to be recovering from a growth slowdown. Most dramatically, in the last two quarters for which data is available, investment in physical capital — which had long been too low for growth to recover — increased by 12 percent and 10 percent, respectively. In the first two months of 2018, exports grew by over 9 percent. For once, optimism seemed warranted: Decent growth and macroeconomic stability seemed likely to bolster optimism, encourage more investment and launch a virtuous cycle. Unfortunately, while growth is indeed reviving, the macro-economy isn’t looking all that robust. Most worryingly, the rupee is just about the worst-performing currency in Asia this year; some analysts believe that it will, before the end of the year, be cheaper against the dollar than ever before. Others may not be as gloomy but, across the board, they’ve lowered their forecasts for India’s currency. What’s going on? Well, in part, the problem is a familiar one: India’s dependence on imported oil. The health of the Indian economy tends to rest on two great, uncontrollable factors — the level of monsoon rains and the price of oil. India’s enjoyed a nice run of low prices and lower import bills for the past several years, as crude prices crashed from over $100 a barrel to near $40 a barrel. But now that they’ve climbed back to $75 a barrel and may go higher, India’s again facing worries about inflation, government spending, and the current account deficit. Back when crude oil prices were at their peak, India was being talked about as one of the “fragile five” economies most at risk from a tightening of the U.S. Federal Reserve’s monetary policies. The country’s current account deficit stood at an uncomfortably high 4.8 percent of GDP. There were even murmurs that India might have to seek relief from the International Monetary Fund, until the government, spooked into action, imposed a sharp series of import controls — particularly on gold, for which India has a ravenous appetite. Then, luckily, crude oil prices began to crash in the middle of 2014. So did the current account deficit, falling to 0.7 percent of GDP in 2016-17. Now things are heading in the opposite direction: Kotak Institutional Equities worries that during 2018-19, India’s current account deficit could be as high 2.9 percent of GDP. In itself, that wouldn’t be a crisis. India has more than enough dollar reserves; capital inflows show no signs of stopping. But, the trend has been ugly enough for the rupee to crash and for worries about inflation to return. The central bank committee that sets monetary policy for India released the minutes of its last meeting recently and most members seem to think that the Reserve Bank of India might need to act soon. In other words, the incipient recovery might be choked off by higher rates even before it properly begins. It’s a frustrating rerun: Once again, India’s insatiable thirst for imports seems destined to hold it back. But, that’s really only half the story. While the cost of imports is rising, exports, in a well-run economy, should be rising to compensate. Instead, India has consistently under-performed as an exporter. After the healthy start to 2018, export growth turned negative in March. Four years ago, India exported $310 billion worth of goods a year. Now, it exports $302 billion a year — the lowest, as a percentage of GDP, in a decade and a half. And anemic world trade isn’t to blame. Four years ago, Vietnam’s exports were $150 billion; in 2017, at $213 billion, they were worth 43 percent more. India’s failure isn’t the inability to wean itself off imported crude. It’s that it has failed to compete in world markets so it can pay for the oil it needs. India has wasted the easy years since 2014 when it should have reformed its export processes, cut red tape, backed its manufacturers and pushed them to go out and create new markets. Instead, export processes are by and large just as complex and inefficient as they were four years ago. Tax incentives for exporters have been withdrawn, tax refunds withheld and the entire orientation of India’s economy turned inward. Instead of building up exports, India has decided to try and ward off imports; the government has raised tariffs across the board, for the first time in a generation. There’s still time to reverse things. If the rupee does in fact hit record lows, India shouldn’t mourn. It should see the new level as a boost for its exporters, an unhoped-for reduction in the price of Indian goods. The government should follow up by slashing red tape and the tariffs that keep Indian companies from integrating with global supply chains. India’s import dependence need not be a chronic disease. There is a cure: exports. Kevin Long Womens Jersey
ONGC bids for 37 oil blocks, Cairn 55 in 1st OALP round
ONGC today bid for 37 oil and gas blocks while Cairn India put in bids for all the 55 areas on offer in India’s maiden auction of oil and gas acreage under the newly formulated open acreage licensing policy. As many as 110 bids had been received, the Directorate General of Hydrocarbon (DGH) tweeted. Bidding in the auction of 55 exploration blocks on offer for prospecting of oil and gas as under the open acreage licensing policy (OALP) closed today. Oil and Natural Gas Corp bid for 26 blocks on its own and another 11 with partners. Cairn India, which is now known as Vedanta Ltd, bid for all the 55 blocks, sources privy to the development said. Cairn put in very aggressive bids for 13 blocks and a little less so for another 9. The remaining bids were mostly routine, they said. State-owned Oil India Ltd (OIL) is the other major bidder in the round that also saw participation of other PSU oil firms like Indian Oil Corp (IOC), GAIL and Bharat Petroleum Corp Ltd (BPCL) mostly as consortium partners. DGH, the upstream technical arm of the ministry of petroleum and natural gas, began opening of offers received under the OALP bid round being held under the new Hydrocarbon Exploration and Licensing Policy (HELP). India had in July last year allowed companies to carve out blocks of their choice with a view to bringing about 2.8 million sq km of unexplored area in the country under exploration. Under this policy, companies are allowed to put in an expression of interest (EoI) for prospecting of oil and gas in any area that is presently not under any production or exploration licence. The EoIs can be put in at anytime of the year but they are accumulated twice annually. As many as 55 blocks were sought for prospecting of oil and gas by prospective bidders, mostly by state-owned explorers Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) and private sector Cairn India by the end of the first EoI cycle on November 15, 2017, they said. The blocks or areas that receive EoIs at the end of a cycle are put up for auction with the originator or the firm that originally selected the area getting a 5-mark advantage. The 55 blocks have a total area of 59,282 sq km. This compares to about 1,02,000 sq km being under exploration currently, they said. Blocks would be awarded to the company which offers highest share of oil and gas to the government and commits to do maximum exploration work by way of shooting 2D and 3D seismic survey and drilling exploration wells. Increased exploration would lead to more oil and gas production, helping the world’s third largest oil importer to cut import dependence. Prime Minister Narendra Modi has set a target of cutting oil import bill by 10 per cent to 67 per cent by 2022 and to half by 2030. Import dependence has increased since 2015 when Modi had set the target. India currently imports 81 per cent of its oil needs. Sources said ONGC and Cairn India had put in 41 out of 57 bids received in November last year. Private player Hindustan Oil Exploration Co (HOEC) bid for one area in a round. Of the 57 EOIs put only 55 blocks were cleared for bidding after eliminating areas that are under no-go zone or overlapping with existing mining lease. The new policy replaced the old system of government carving out areas and bidding them out. It guarantees marketing and pricing freedom and moves away from production sharing model of previous rounds to a revenue sharing model where companies offering maximum share of oil and gas to government are awarded the block. Till now, the government has been selecting and demarcating areas it feels can be offered for bidding in an exploration licensing round. So far 256 blocks had been offered for exploration and production since 2000. The last bid round happened in 2010. Of these, 254 blocks were awarded. But as many as 156 have already been relinquished due to poor prospectivity. Tyson Jackson Jersey