India, the world’s third biggest oil importer and consumer, depends on foreign purchases for over 80% of its oil needs. The nation’s oil and gas output has been stagnant for years, forcing it to raise reliance on imports to meet rising fuel demand.
“The government will grant petroleum mining lease rights but the companies should consider a farm-out (of a stake) to get global technology players,” Pradhan said.
Exploration companies should work at “exponential speed” to unlock resources, Pradhan said at production sharing signing ceremony of 11 oil and blocks by state-run Oil and Natural Gas Corp and Oil India. The blocks in 8 sedimentary basins covering a total acreage of 19,789.04 sq km, have been awarded under Open Acerage Licencing Policy Bid Round 5, with Rs 465 crore of immediate exploration work commitment. The ONGC has been awarded 7 blocks where 4 blocks went to the Oil India Ltd.
India’s exploration licencing rounds have so far seen a lukewarm response from global oil majors, with most of the blocks awarded to local companies, mainly ONGC and Oil India. The firms have to reject a “business as usual approach” and adopt a professionally-run “commercially viable and technological friendly” model to boost output, Pradhan said.