India to tap unexplored sedimentary basins in upstream energy revival

Sedimentary basins offer a strong prospect for India to realize its upstream potential, petroleum minister Hardeep Singh Puri said July 11, as the country looks to attract foreign investments and grow domestic oil and gas output.

Highlighting that India's upstream sector offered an investment opportunity to the tune of $100 billion by 2030, Puri drew the attention of foreign and private investors to India's 26 sedimentary basins, saying that the bulk of those areas are yet to be explored.

"Only 10% of our sedimentary basin area is under exploration today," Puri said while inaugurating a two-day industry conference organized by the Directorate General of Hydrocarbons, the state-run upstream regulator.

"After the award of blocks under the forthcoming Open Acreage Licensing Policy (OALP) rounds, it will increase to 16% by end-2024," he added.

The 10th round of bidding for oil and gas assets under the OALP is expected to start next month, while winning bids under the ninth round would also be announced simultaneously, oil ministry officials said.

"The government is doing its part to catalyze investments in E&P, " Puri said.

Unexplored areas

The Category-II and III basins in India, including Mahanadi, Andaman Sea, Bengal, and Kerala-Konkan, remain largely unexplored to date, according to S&P Global Commodity Insights. The estimated undiscovered hydrocarbon potential in these four basins is around 22 billion barrels of oil equivalent.

Over the past three to four years, global exploration companies have been increasingly venturing into offshore frontier and deepwater and ultra-deepwater areas in pursuit of major discoveries. The recent findings by Harbour Energy and Mubadala in the North-Sumatra Basin have made the Andaman Sea a focal point for frontier exploration, according to Commodity Insights.

"ONGC and Oil India hold acreages in the Andaman waters under OLAP and have planned few significant projects. However, India still awaits the entry of an international oil company with deepwater and ultra-deepwater exploration expertise to participate in current and upcoming OALP bidding rounds and explore these frontier regions," said Rahul Chauhan, upstream analyst at Commodity Insights.

Reducing import dependency

Under OALP, India allows upstream companies to carve out areas for oil and gas exploration. Exploration companies can put in an expression of interest for any area throughout the year. But such interests are accumulated thrice in a year following which the areas sought are put on auction.

Since 2016, the auctions of OALP rounds have been taking place under the hydrocarbon exploration and licensing policy that invites expressions of interest in any area that is not under a production or exploration license.

Puri said that under the initial eight OALP bid rounds, a total of 144 blocks covering about 244,007 sq km have been awarded and recently announced ninth round offers an area of around 136,596 sq km spread over eight sedimentary basins.

The discovered small field policy, since its inception in 2015, has garnered investments of nearly $2 billion and had brought in 29 new players into the field, he added.

"Reducing delays in the approval of field development plans, annual plans, and other regulatory permissions is crucial, especially as our nation's import dependency continues to rise," Puri said.