Vedanta has secured 10 exploration blocks in sedimentary basins throughout India, through the Indian Open Acreage Licensing Policy (OALP) at a total bid cost of $245m (£195m).

The OALP is a government-led initiative run by the Directorate General of Hydrocarbons of the Government of India (GoI).

The 10 blocks awarded to Vedanta include 7 onshore blocks and 3 offshore blocks.

Vedanta is expected to sign 10 revenue sharing contracts (RSCs) with the GoI in connection with the transaction, following which, a licence permitting exploration, development and production operations of all types of hydrocarbons will be awarded, according to the terms of the relevant RSC in relation to each Block.

The exploration period is divided into two phases namely, the initial exploration phase, and the subsequent exploration phase.

Under the transaction terms, the duration of exploration period is six years for all blocks, which is subject to any extension granted.

In addition, the development and production period of each contract is limited to a maximum of 20 years from the date of grant of the petroleum mining lease, after the discovery of previously unknown deposits of hydrocarbons and approval of the relevant field development plan.

The transaction to complement existing strategy of Vedanta to focus on production growth

Vedanta said that the transaction complements its existing strategy to focus on production growth, and the blocks awarded under OALP bid round II & III, would add to the 41 blocks secured in OALP bid round I.

The firm said: “The OALP bid rounds provide an opportunity for the Group to acquire new acreages from additional sedimentary basins of India and utilize synergies from the Blocks already secured.

“The objective of licensing the Blocks is to acquire fresh seismic data and drill exploration wells to establish resources and reserves of oil and/or gas.”

The company added that the bid cost of $245m (£195m) represents its total committed capital expenditure on the blocks during the exploration phase and is expected to be fulfilled using the its existing cash resources.