India’s Oil and Gas Bid Round Sees Limited Interest: ONGC and Vedanta Stand Out

India’s largest oil and gas bid round, OALP-IX, attracted limited participation, with 4 bidders, including state-owned ONGC and OIL, and private players Reliance and  Vedanta Ltd, dominated the round. The Directorate General of Hydrocarbons (DGH) reported that most of the 28 blocks on offer received just two bids. 

Notably, Reliance Industries Ltd, in partnership with bp plc, joined forces with ONGC for the first time to bid on a block in Gujarat offshore, marking a strategic collaboration in the shallow waters of the Gujarat-Saurashtra basin. Reliance-bp, which had previously bid in only two of the eight rounds since 2017, has typically bid independently but has now teamed up with ONGC for a more targeted approach.

ONGC emerged as the most active bidder, submitting bids for 19 out of the 28 blocks, both independently and in partnership with firms like Oil India Ltd (OIL) and Indian Oil Corporation (IOC). Vedanta Ltd, owned by mining tycoon Anil Agarwal, bid for all 28 blocks, demonstrating aggressive participation, while Sun Petrochemicals Ltd bid for seven areas.

Of the 28 blocks, 9 are onshore, 8 are shallow-water, and 11 are ultra-deepwater blocks, covering an area of 136,596.45 sq km across eight sedimentary basins. The auction marks a continuation of India’s efforts to boost domestic oil and gas production under the Open Acreage Licensing Policy (OALP), introduced in 2017, to attract investment in the upstream sector. 

The policy offers marketing and pricing freedom, a revenue-sharing model, and reduced royalty rates. Despite the government’s efforts to open more acreage, private sector participation has been limited. Vedanta Ltd is the most prominent private player, having secured a significant number of blocks in previous rounds. The government remains hopeful that these efforts will help reduce India’s reliance on oil imports, which currently cost the country USD 222 billion annually.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.