India will launch the fifth round of its New Exploration Licensing Policy (NELP-V) in a month, hoping to increase upstream investment and provide more oil reserves for the energy-deficient country that imports 70 percent of its crude oil requirement.
"The discoveries from the previous NELP rounds are very encouraging. We expect more discoveries and greater interest in India," an oil ministry official said.
Indian firms are stepping up exploration spending, hoping to emulate Reliance Industries, which found 14 trillion cubic feet (396.4 billion cu metres) of gas in 2002, and Britain's Cairn Energy Plc, which made a significant oil discovery in the desert state of Rajasthan.
Cairn said this year its Mangala field in Rajasthan had estimated oil in place of 450-1,100 million barrels, which Indian officials say could be India's biggest discovery since the giant Bombay High offshore oil field was found in the 1970s.
In the next 20 years, India could add 6.5 billion tonnes (47 billion barrels) to its hydrocarbon reserves and boost crude output to 1.1 million barrels per day (bpd) from the present 660,000 bpd, Avinash Chandra, a consultant and India's former director-general (hydrocarbons) told Reuters.
Since 2002, India has added 300 million tonnes (2.2 billion barrels) a year to its hydrocarbon reserves and had to maintain this rate for 20 years to more than double India's crude oil and gas output, Chandra said.
BOTTOM OF THE SEA: "It is true that the Indian exploration sector has become a lot more attractive after discoveries by Reliance and Cairn," said Alister Morrison of consultancy Wood Mackenzie.
But in the short term, India's exploration scene was likely to be dominated by Reliance, state-run Oil and Natural Gas Corp (ONGC) along with small and medium-sized foreign firms, analysts said.
"India is getting much more interesting, but it may not be that interesting for the majors. They might look at deepwater exploration - that is the real hotspot," Morrison said.
Foreign firms are keenly watching the outcome of deepsea drilling by ONGC and Reliance, which have bagged all the deepwater blocks offered in NELP, he said.
The two companies are expected to drill 50 to 60 deepwater wells between them in the next three years.