New Delhi, April 20 – India’s oil and gas exploration sector received a major boost with over $36 billion investment under the New Exploration Licensing Policy (NELP) before 2014, yielding 177 oil and gas discoveries, according to a recent report by the Ministry of Petroleum and Natural Gas.
The report, compiled by a Joint Working Group on Ease of Doing Business in India’s Upstream Oil and Gas Sector, highlighted that between 1999 and 2010, nine rounds of NELP bidding led to the allocation of 254 oil and gas blocks. These blocks attracted an investment of $17.6 billion in exploration and an additional $18.64 billion in development activities. The outcome was 67 oil finds and 110 gas discoveries, marking a significant achievement for India’s energy sector.
Among the most prominent NELP-awarded blocks are Reliance Industries and BP Plc’s KG-D6 block and ONGC’s KG-D5 (KG-DWN-98/2) block, both located in the Krishna-Godavari Basin. KG-D6 alone currently contributes nearly one-third of India’s total natural gas production, underscoring the importance of these discoveries.
The NELP regime allowed operators to recover their investments before profit-sharing with the government, following a Production Sharing Contract (PSC) model. This framework helped attract private and foreign investment into India’s upstream sector, with notable international players like British Gas, Cairn Energy, Eni, BP, and BHP Billiton participating in bidding rounds. Their involvement brought in advanced exploration technology and global expertise.
Despite the substantial progress, the report acknowledged several challenges under NELP. These included delays in environmental and regulatory clearances, and disputes over cost recovery, with different interpretations of PSC terms leading to frequent conflicts between the government and private contractors.
To address these concerns, the government introduced major reforms starting in 2016, replacing NELP with the Hydrocarbon Exploration and Licensing Policy (HELP). Under HELP, India transitioned to a Revenue Sharing Contract (RSC) model, where the government and contractors share revenues based on pre-agreed percentages, regardless of the costs incurred. This simplified model aims to eliminate disputes over cost recovery and bring greater transparency and ease of operation.
The RSC regime was rolled out through eight bidding rounds under the Open Acreage Licensing Policy (OALP) from 2018 to 2022. During this period, 144 blocks were awarded, attracting $1.37 billion investment and resulting in 6 oil and 4 gas discoveries, as per the report.
The most recent OALP-IX round concluded last week, with contracts signed for 28 new exploration blocks. The OALP-X round is now under offer, as the government continues to push for expanding India’s domestic energy production.
In parallel, the Discovered Small Field (DSF) policy, introduced in 2015, has been instrumental in monetizing smaller oil and gas discoveries that were previously undeveloped due to economic concerns. Since 2016, three DSF bid rounds have awarded 85 contract areas, drawing $69 million investment in exploration and $192 million in development. Presently, 51 of these areas are active, and just last week, contracts for two more DSF blocks were signed under a Special DSF Bid Round, with a fourth round now open.
The report praised these policy shifts, stating that the RSC model represents a “transformational shift in India’s exploration and production framework,” aiming to reduce bureaucracy, boost transparency, and increase investor confidence. By aligning with global best practices, India hopes to not only improve domestic output but also attract more foreign direct investment (FDI) into the sector.
Overall, the evolution from NELP to HELP reflects the government’s long-term vision to create an efficient and globally competitive upstream sector. With streamlined processes, simplified contracts, and a focus on ease of doing business, India’s oil and gas sector is positioned for sustained growth in the coming years.
also see
- HDFC Bank Q4 Results: Steady Profit Growth and Strong Asset Quality
- Trump Replaces covid.gov With Lab-Leak Focused Site, Sparking Controversy
- UPI Down Today
1 thought on “India Attracts $36 Billion in Oil and Gas Investments Under NELP: Oil Ministry”