India’s Oil and Gas Sector Sees $36 Billion Investment

India’s upstream oil and gas sector underwent a transformative phase prior to 2014 under the New Exploration Licensing Policy (NELP). Over the course of nine bidding rounds, the country successfully attracted investments exceeding ₹3,07,368 crore (approximately US$ 36 billion). These rounds collectively led to 177 oil and gas discoveries, marking a significant milestone in India’s quest for energy security.

NELP offered blocks to companies based on competitive bidding and allowed for cost recovery prior to profit sharing with the government under the Production Sharing Contract (PSC) regime. However, while the policy succeeded in mobilising capital and expanding exploration, it also encountered operational setbacks. Delays in clearances and disputes over cost recovery often hampered the pace of project execution and led to investor dissatisfaction.

HELP: A Structural Shift to Revenue Sharing

To address the challenges associated with the PSC model, the Indian government introduced the Hydrocarbon Exploration and Licensing Policy (HELP) in 2016. This policy marked a strategic shift to a Revenue Sharing Contract (RSC) model. Under RSCs, revenue from hydrocarbon sales is shared between the government and contractors at predetermined rates, irrespective of the actual costs incurred during exploration and production.

This approach aimed to simplify operations, enhance transparency, and offer greater autonomy to exploration companies, aligning India’s regulatory framework with global best practices.

Investments Continue under OALP and DSF Initiatives

Building upon the momentum, India launched the Open Acreage Licensing Policy (OALP) in 2018. Between 2018 and 2022, eight OALP rounds resulted in a further ₹11,697 crore (US$ 1.37 billion) of investment and led to the discovery of 6 oil fields and four gas fields.

This phase also witnessed participation from leading international oil companies such as British Gas, BP, Cairn Energy, Eni, and BHP Billiton, who brought not only capital but also cutting-edge technology and global expertise to Indian exploration efforts.

Additionally, the government rolled out the Discovered Small Field (DSF) policy in 2015, specifically targeting the monetisation of small and marginal fields. As of today, 51 out of 85 awarded DSF contract areas are active, indicating encouraging levels of operational engagement.

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Ongoing Efforts to Foster a Competitive Ecosystem

The government’s drive to enhance exploration continues with new rounds of bidding under OALP and DSF. In the recently concluded OALP-IX round, contracts for 28 exploration blocks were signed, and preparations are underway for the 10th round.

These initiatives are part of a broader push to improve the ease of doing business, ensure policy continuity, and attract private and foreign investment into India’s vital energy sector.

Conclusion

India’s journey from the early NELP rounds to the current HELP and OALP frameworks illustrates its evolving approach to managing hydrocarbon resources. With a clear shift towards simplification, transparency, and global alignment, the country is laying down a robust foundation for sustained energy exploration and self-reliance.

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