Private oil companies were awarded licenses for the development of two-thirds of the 31 small oil and gas fields tendered by the Indian government as part of efforts to reduce the country's dependence on imports. According to local media, these fields, although small, will be instrumental in achieving PM Modi's target of cutting imports by 10 percent by 2022.
The rest of the fields were awarded to state-owned companies, including Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum Corporation. Bharat Petroleum got the most licenses, for five fields, after bidding for eight. The company that bid for the most fields was one of the newest entrants, Akhtil Teja Natural Resources, which placed offers for 17 fields but came away from the auction empty-handed.
A total of 46 small oil and gas fields were tendered last year, with just 34 of them attracting bids. This was the first oil and gas tender in the country in six years.
The 31 fields hold a combined 62 million tons of crude and oil equivalent in gas and can produce, at peak exploitation, 15,000 barrels of oil and 2 million cu m of natural gas daily, according to the Directorate General of Hydrocarbons.
India's daily oil demand is forecasted to reach 4.13 million barrels this year, up 7 percent on 2016, according to Platts. Last month, imports went up by 3.7 percent on the year, to 4.34 million barrels daily, down from 4.47 million bpd in December but up from 4.186 in January 2016. The country has been expanding its refining capacity in response to higher fuel demand.
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India is the focus of attention for many players in the global oil industry as it is widely seen to replace China as the world's economic powerhouse, betting on manufacturing. At the moment, India is importing the most oil from the Middle East and Russia, with Iran standing out among the rest as imports from there tripled last month from a year ago. Iran used to be India's number-two supplier of oil before the sanctions, and is now third, after Saudi Arabia and Iraq.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More