Third Round of OALP

Prelims level : Economy Mains level : Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
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In News:

  • Indian government offered 23 oil and gas and CBM blocks for bidding in the third round of Open Acreage Licensing Policy (OLAP), expecting up to $700 million of investment that it hoped will help raise domestic output and cut imports.


  • OALP-III bid round was launched at the Petrotech 2019 conference
  • In OALP-III, 23 blocks in 12 sedimentary basins are being offered. Of these, five are coal-bed methane (CBM) blocks. Total area on offer is about 31,000 square kilometers.
  • OALP-III will run concurrently with OALP-II, where 14 blocks, covering an area of close to 30,000 sq km, is on offer for bidding, OALP-I, 55 blocks, covering an area of 60,000 sq km, were offered in January 2018 and awarded in October last year.
  • The third round is expected to “generate immediate exploration work commitment of around $600-$700 million.


  • Under this policy, called open acreage licensing policy or OALP, oil companies are allowed to put in an expression of interest (EoI) for prospecting of oil and gas in any area that is presently not under any production or exploration licence. The EoIs can be put in at any time of the year but they are accumulated twice annually.
  • Blocks are awarded to the company which offers the highest share of oil and gas to the government as well as commits to do maximum exploration work by way of shooting 2D and 3D seismic survey and drilling exploration wells.
  • Increased exploration will lead to more oil and gas production, helping the world’s third largest oil importer to cut import dependence. Prime Minister has set a target of cutting oil import bill by 10 per cent to 67 per cent by 2022 and to half by 2030.
  • India currently imports 81 per cent of its oil needs. The new policy replaced the old system of government carving out areas and bidding them out.
  • It guarantees marketing and pricing freedom and moves away from production sharing model of previous rounds to a revenue-sharing model, where companies offering the maximum share of oil and gas to the government are awarded the block.
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