The government is aiming at ending the current regime of oil exploration licensing by 2011. This will allow firms to identify oil exploration areas they want to drill. The move will end the new exploration licensing policy which has seen increased role of private sector and is currently in its eighth round.
At present, the government auctions pre-defined blocks under its exploration licensing rounds that are open for a fixed period. However, in the new system, companies may be allowed to identify the area they want to drill and can bid for the same at any time of the year. This will provide greater flexibility to the oil exploration companies.
However, in order to implement such a system of allocation of oil blocks, known as open acreage system, government will first have to set up a National Data Repository, which is expected to be completed by March 2010,according to the Director General of Hydrocarbons.
The government has so far awarded 203 exploration blocks under seven licensing rounds and has now offered 70 blocks in the latest round closing on October 12. However, most countries in world like Australia, Norway, Britain, Brazil, Canada, and the United States rely on national data repository for allocation of blocks. Once the government moves to open acreage system, it expects crude oil production in the country to pick up.