Government Launches Special Licensing Round for Deepwater and Ultra-Deepwater Blocks

New Delhi, 6 Nov (KNN) The government is introducing a special licensing round for deepwater and ultra-deepwater oil and gas blocks, offering monthly bidding windows and relaxed financial terms to encourage offshore exploration. Under its Rs 84,084-crore Samudra Manthan programme, the Centre will cover up to 50 percent of eligible exploratory drilling costs to reduce investment risks.

The Directorate General of Hydrocarbons (DGH) said the special round under the Open Acreage Licensing Policy (OALP) would enable faster allocation of offshore blocks. Details of the bidding round will be announced shortly as reported by The Business Standards.

Monthly Bidding and Revised Evaluation Criteria

A 21-day Expression of Interest (EoI) window will open on the first day of every month, providing 12 bidding opportunities annually. Each window will have a separate evaluation and award process, allowing multiple rounds to run simultaneously.

Bids will be assessed on the basis of the Committed Work Programme instead of revenue-sharing quotations. The block's originator will receive 10 marks, while another 10 marks will be awarded for demonstrated deepwater or ultra-deepwater drilling experience.

Government to Share Exploration Costs

The scheme allocates Rs 43,200 crore for accelerated offshore exploration, including 60 deepwater exploratory wells. The government will provide up to 50 percent of eligible drilling costs, capped at Rs 675 crore per well, whichever is lower.

It also earmarks Rs 28,534 crore for offshore seismic data acquisition and processing, Rs 10,000 crore for common offshore infrastructure and Rs 2,000 crore for oil and gas manufacturing and services zones.

Approved by the Union Cabinet on July 31, 2026, the programme aims to add more than 600 million tonnes of oil equivalent to India's hydrocarbon reserves, increase domestic production and reduce import dependence.

Relaxed Financial and Consortium Requirements

Companies meeting the prescribed standalone net-worth requirement will not need a separate financial and performance guarantee from their parent company.

For consortiums led by Oil and Natural Gas Corporation (ONGC) or Oil India Ltd (OIL), partners' net worth will not be assessed separately if the operator meets 100 percent of the required net-worth criteria. This applies to qualifying international or foreign national oil companies, or their E&P subsidiaries, with a net worth of at least USD 10 billion.

Such companies can also transfer their interests to an Indian national oil company already party to the contract without prior government approval.

Flexible Bid Bonds and Revenue-Sharing Terms

Companies can submit a single revolving bid bond of USD 2 million for participation across multiple bidding windows or provide a separate guarantee for each bid. Guarantees can be submitted through electronic bank guarantees or Insurance Surety Bonds regulated by the Insurance Regulatory and Development Authority of India (IRDAI).

For Category-I deepwater and ultra-deepwater blocks, revenue sharing will apply only when windfall gains accrue during the first five years of production. From the sixth year onwards, the applicable share will be the higher of 5 percent of revenue or the relevant windfall gain slab.

The revised framework is intended to attract private investment, accelerate offshore exploration and strengthen India's domestic energy security.

(KNN Bureau)