India to Offer 56 Oil, Gas Blocks in Next Licensing Round

India is mulling offering at least 56 oil and gas exploration blocks in the new licensing round, based on new gas-pricing and revenue-sharing rules, news agency Reuters quotes oil secretary Vivek Rae as saying.

"Gas pricing is the single most important decision that will encourage and invite more companies to invest in India," said Rae, reports Reuters.

Early last year, India hiked price of all domestically produced natural gas to $8.4/mmBtu from $4.2/mmBtu. Higher prices would come into effect from April 1.

In the previous rounds foreign firms showed lukewarm response because of a lack of transparency, regulatory hurdles and bureaucratic delays in getting clearance, reports Reuters.

According to Rae, bids would be invited in February.

The ministry has already circulated a draft note in the cabinet for comments from the planning commission and finance and law ministries among other agencies, says Reuters.

The next round is likely to see contractors sharing revenue with the government, unlike current regime under which companies recover their costs and then share profits with the government.

Analysts are sceptical about the success of India's next auction of oil and gas blocks, says Reuters.

"Such models (revenue-sharing) work in the Middle East and other regions that have an abundance of reserves, but India, where there isn't too much oil, cant afford this model. There are serious questions on this auction round. I doubt if they will get a good response," the news agency quotes an oil and gas analyst as saying.

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