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Centre launches oil, gas exploration bids amidst windfall tax blow

The government is hoping that if it puts more blocks forbidding domestic production will rise, helping to cut down the oil import bill
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The Telegraph   |   New Delhi   |   Published 09.07.22, 01:12 AM

The Centre has launched the eighth round of oil and gas exploration bids amidst the windfall tax blow on producers such as ONGC, Oil India and Vedanta.

The government is offering 10 blocks spread over nine sedimentary basins covering an area of 36,316.5 square kilometres. Two of the 10 blocks are on land, four in shallow water and two each in deep water and very deep water.

The oil and gas regulator said the bids would close on September 6. One of the shallow blocks is in Bengal— Purnea covering about 5,754sq km.

The government is hoping that if it puts more blocks forbidding domestic production will rise, helping to cut down the oil import bill.

However, earlier this month, it imposed a special additional duty of Rs 23,230per tonne on domestically produced crude oil to take away windfall gains from high international oil prices.

Analysts said the move would discourage E&P (exploration and production) firms to look at the country as a prospective destination for oil and gas when they have blocks of offer from proven energy-rich countries.

They said the government should, rather, incentivise the exploration firm to invest in the country given the high risk involved in finding oil and gas in the country.

Data showed that India’s crude oil production fell 2.6per cent year-on-year to 29.69million tonnes (mt) in the last fiscal year against 30.49 mt in FY21 largely because of lower production by state-run ONGC.

Meanwhile, state-owned ONGC, OIL and GAIL walked away with most of the eight blocks offered for exploration and production of oil and gas in the OALP seventh bid.

Oil and Natural Gas Corporation (ONGC) won three blocks, while Oil India Ltd (OIL) won two, the directorate general of hydrocarbons said.



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