Indian oil ministry has cleared 56 oil and gas exploration blocks for auction in a bid to encourage foreign investment and reduce the country’s dependency on hydrocarbons’ imports.
The first licence’s auction in India in two years, planned for next month, is expected to generate interest among foreign exploration companies due to the planned gas pricing increase from April 1.
Low return on investment due to the country’s pricing system, together with delays in obtaining permits, have been considered the main reasons for international investors selling off their assets in India.
The ministry is also looking to introduce revenue-sharing rules, by which prospective investors would cover their exploration costs and share their profits with the government.
The news comes shortly after the country’s national energy company, Oil and Natural Gas Corporation (ONGC), announced it was going to invest $9billion (£5.48billion) in exploration off India’s east coast in the next decade.
The country is hoping foreign and home investment in local production will reduce its dependency on crude oil imports, currently sourcing 80% of its reserves from overseas.
