New Delhi: India has assured foreign oil majors and other potential investors it will not nationalise oilfields or dilute operators’ rights without compensation, as it launched the XIth exploration licensing round offering 21 blocks on Monday.
The bidding window will close on May 29, along with that of the previous Xth round under the Open Acreage Licensing Policy (OALP). India urgently needs to revive its exploration and production sector, with domestic output declining for years. The Iran war and the resulting global energy disruptions have further exposed the country’s vulnerability due to its heavy reliance on imports. The Xth round of bidding for 25 blocks has seen multiple deadline extensions as, after its launch in February 2025, the government amended the oilfield regulatory law, framed new rules, and introduced a revised model oilfield contract.
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A draft revenue-sharing contract released for consultation had proposed compensation if companies were deprived of asset ownership or contractual rights.
The final model contract—applicable to both the Xth and XIth rounds—goes further, explicitly stating that the fields will not be nationalised. “The Government of India shall not nationalise or otherwise take away the rights, interests or assets of the member relating to this contract, except in compliance with the due process of law of India, for reasons of public purpose and payment of appropriate compensation,” the contract states.
Contractors “shall be paid an adequate amount as compensation, which shall be equal to the fair market value of the rights, interests (including those relating to undeveloped reserves) or assets nationalised or otherwise taken away by the Government of India,” it adds.
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ExxonMobil, which suffered heavy losses after Venezuela nationalised its oil and gas assets over a decade ago, has long pushed for safeguards against expropriation in India, along with neutral arbitration and protection of economic returns in case of adverse government action—demands the new framework seeks to address.
The contract also allows consortiums with a foreign member—regardless of their stake—to choose a foreign seat for arbitration, while consortiums solely comprising Indian firms will have New Delhi as the seat of arbitration.
“The Government of India shall not nationalise or otherwise take away the rights, interests or assets of the member relating to this contract, except in compliance with the due process of law of India, for reasons of public purpose and payment of appropriate compensation,” the contract states.
Contractors “shall be paid an adequate amount as compensation, which shall be equal to the fair market value of the rights, interests (including those relating to undeveloped reserves) or assets nationalised or otherwise taken away by the Government of India,” it adds.
ExxonMobil, which suffered heavy losses after Venezuela nationalised its oil and gas assets over a decade ago, has long pushed for safeguards against expropriation in India, along with neutral arbitration and protection of economic returns in case of adverse government action—demands the new framework seeks to address. The contract also allows consortiums with a foreign member—regardless of their stake—to choose a foreign seat for arbitration.
The bidding window will close on May 29, along with that of the previous Xth round under the Open Acreage Licensing Policy (OALP). India urgently needs to revive its exploration and production sector, with domestic output declining for years. The Iran war and the resulting global energy disruptions have further exposed the country’s vulnerability due to its heavy reliance on imports. The Xth round of bidding for 25 blocks has seen multiple deadline extensions as, after its launch in February 2025, the government amended the oilfield regulatory law, framed new rules, and introduced a revised model oilfield contract.
Also Read | Renewable share rises; oil, gas import dependence increases: Report
A draft revenue-sharing contract released for consultation had proposed compensation if companies were deprived of asset ownership or contractual rights.
The final model contract—applicable to both the Xth and XIth rounds—goes further, explicitly stating that the fields will not be nationalised. “The Government of India shall not nationalise or otherwise take away the rights, interests or assets of the member relating to this contract, except in compliance with the due process of law of India, for reasons of public purpose and payment of appropriate compensation,” the contract states.
Contractors “shall be paid an adequate amount as compensation, which shall be equal to the fair market value of the rights, interests (including those relating to undeveloped reserves) or assets nationalised or otherwise taken away by the Government of India,” it adds.
Also Read | Oil shock is quietly morphing into a global growth crisis, warns Stephen Innes
ExxonMobil, which suffered heavy losses after Venezuela nationalised its oil and gas assets over a decade ago, has long pushed for safeguards against expropriation in India, along with neutral arbitration and protection of economic returns in case of adverse government action—demands the new framework seeks to address.
The contract also allows consortiums with a foreign member—regardless of their stake—to choose a foreign seat for arbitration, while consortiums solely comprising Indian firms will have New Delhi as the seat of arbitration.
‘Adequate Compensation’
A draft revenue-sharing contract released for consultation had proposed compensation if companies were deprived of asset ownership or contractual rights. The final model contract—applicable to both the Xth and XIth rounds—goes further, explicitly stating that the fields will not be nationalised.“The Government of India shall not nationalise or otherwise take away the rights, interests or assets of the member relating to this contract, except in compliance with the due process of law of India, for reasons of public purpose and payment of appropriate compensation,” the contract states.
Contractors “shall be paid an adequate amount as compensation, which shall be equal to the fair market value of the rights, interests (including those relating to undeveloped reserves) or assets nationalised or otherwise taken away by the Government of India,” it adds.
ExxonMobil, which suffered heavy losses after Venezuela nationalised its oil and gas assets over a decade ago, has long pushed for safeguards against expropriation in India, along with neutral arbitration and protection of economic returns in case of adverse government action—demands the new framework seeks to address. The contract also allows consortiums with a foreign member—regardless of their stake—to choose a foreign seat for arbitration.
