BP's exploration license in India to whet appetite of global oil majors

BP's signing of an exploration licensing deal in India, as part of a consortium with Oil and Natural Gas Corp. and Reliance Industries Ltd., makes it the only international company to secure upstream contracts in the country, potentially whetting the appetite of more global majors to participate in future bidding rounds.

On April 15, BP told Platts, part of S&P Global Commodity Insights, that it has signed a contract for a new exploration license under the consortium consisting of ONGC, holding a 40% stake, Reliance with a 30% stake and BP with the remaining 30% stake for block GS-OSHP-2022/2 in the Saurashtra Basin as part of the ninth round of the Open Acreage Licensing Policy, or OALP IX.

"This strategic collaboration brings together the expertise of India's largest national oil and gas company, ONGC, the largest Indian conglomerate, Reliance Industries, and global energy major BP. This consortium leverages the strengths of all parties and is another step toward strengthening India's energy security goals," a BP spokesperson said.

Oil ministry officials said they received 60 bids for the ninth round of OALP, under which 28 blocks, spread over 136,596 sq km, were offered in eight sedimentary basins.

According to Commodity Insights, out of the 28 blocks on offer, 16 are category-1 basins, which have reserves and are already in the production stage, while 12 are category-2 basins, which have contingent resources but are pending commercial production. No category-3 blocks, which have prospective resources and are awaiting discovery, were offered in the ninth round.

"So far, BP is the only major player that has shown interest in the OALP rounds, while other global international oil companies have remained largely disengaged," said Rahul Chauhan, upstream principal technical research analyst at Commodity Insights. "The recently passed ORD Amendment 2024 by the Indian Parliament aims to reform the existing legal framework to better align with current market needs and conditions, potentially making the Indian upstream sector more attractive to investors."

BP, in partnership with Reliance, previously secured one block each during the OALP-II and OALP-VIII bidding rounds, both located in the KG Basin. OALP-IX marks the first collaboration between BP, RIL, and ONGC in an OALP bidding round.

Policy overhaul

Under OALP, India permits upstream companies to designate areas for oil and gas exploration. The flexible upstream policy allows explorers to submit an expression of interest for any area throughout the year, and the designated areas are subsequently put up for auction.

In March, India's parliament granted final approval to amend a decades-old upstream act -- the Oil Fields (Regulation and Development) Act of 1948 -- aiming to broaden the scope of its exploration policy beyond petroleum and natural gas. The amendment also seeks to relax certain regulations to attract investment from private and international participants in the sector.

Under OALP IX, ONGC was awarded 11 blocks, while Vedanta, which owns Cairn Oil and Gas, secured seven blocks, and Oil India Ltd. won six blocks. A consortium of ONGC and Oil India won three blocks, while another consortium of ONGC, Reliance and BP obtained one block in the round.

According to Commodity Insights analysts, India's upstream output has been declining at an average annual rate of 1.1% over the past decade due to the natural depletion of mature fields operated by state-run producers, delays in monetizing existing discoveries and a reduced number of new discoveries. However, until the ninth round, overseas interest in exploration bidding rounds remained elusive.

Earlier in 2025, India launched the 10th licensing round, or OALP X, marking the largest bid round in terms of acreage offered in a single round. The 10th round offers 25 blocks with an area of 191,986 sq.km and spans 13 sedimentary basins. Of the 25 blocks, six are located in shallow water, six on land, one in deepwater and the remaining in ultra-deepwater areas.

"Should the reforms in the ORD Amendment Bill 2024 be integrated into the OALP-X bidding round, there is a possibility of increased interest from other global oil and gas majors, which could significantly enhance exploration efforts in the country," Chauhan said.

Growing interest

Petroleum Minister Hardeep Singh Puri said while announcing OALP IX results that India is expected to receive an enhanced response from global upstream companies in the following rounds of oil and gas acreage licensing.

“The Indian hydrocarbon sector is entering a new era of accelerated exploration and development,” he said, adding that India was building a future-ready energy ecosystem through investor-friendly reforms, swift approvals, scientific exploration and a strong emphasis on sustainability.

The minister said the urgency for domestic exploration and production has never been greater, given that India relies on imports for 88% of its crude oil and 50% of its natural gas requirements.

“In the next two decades, 25% of the world’s incremental energy demand growth will come from India,” the minister said, noting that the Indian upstream sector faced a "dull decade" between 2006 and 2016 due to policy bottlenecks and procedural delays, leading to the exit of global energy giants like BP, Eni and Santos. However, the tide has turned, Puri said.

A key achievement has been the expansion of exploration activity, with the explored area of India’s sedimentary basins increasing from 6% in 2014 to 10% today, and a target set to reach 15%, he said.

According to Commodity Insights, enhancing domestic oil and gas production, with a particular focus on exploring the country's category-2 and category-3 basins, is a key component of India's energy security strategy.