By Nidhi Verma
NEW DELHI, Jan 7 (Reuters) - Energy-hungry India will allowstate-owned explorers to rope in the private sector to raiseproduction from old fields as the world's third biggest oilimporter strives to better exploit its hydrocarbon resources andcut dependence on foreign oil.
India is the world's third-largest oil consumer and buysabout 80 percent of its supplies from abroad. Prime MinisterNarendra Modi has set a target to cut India's dependence onforeign oil to 67 percent by 2022.
India is looking at raising production from "nominationblocks," or fields handed to state-owned Oil and Natural GasCorp (ONGC) and Oil India Ltd afterindependence, oil minister Dharmendra Pradhan said on Monday.The fields are both onshore and offshore.
The boards of ONGC and Oil India will be allowed to issueproduction enhancement contracts and bring in private players todrill some nomination fields, Pradhan said.
He said the current fiscal model was not supportive ofraising output from nomination fields.
"Revenue was the priority at one point of time but now thegovernment is of the view that the priority is to raiseproduction," Pradhan told reporters at a function to launch thecountry's second licensing round under new rules.
India has offered 14 blocks under the latest auction andwill offer another 23 fields, including five coal bed methaneblocks, in the next round later this month. It hopes to launchtwo more rounds by December.
Pradhan also said India would offer higher incentives forproduction from old blocks in frontier or difficult areas.
So far, the key criteria for winning a block has been thehigher revenue offered to the government from the oil and gasproduction. But the policy has not helped oil and gas output,which has been stagnant for years.
After the discovery of the Bombay High oil fields in 1974and Bassein gas fields in 1976, ONGC has not been able to bringany new major fields into production in the last four decades.
India has also failed to draw interest from global oilmajors in licensing rounds since 1990 even though the fiscalterms were eased. However, Royal Dutch Shell and BP later boughtstakes from firms that had won drilling rights.(Reporting by Nidhi Verma; Editing by Mark Potter)
BP (BP.)
