New Delhi: The government is planning to offer higher incentives to ONGC and Oil India to increase output from old blocks in difficult areas, oil minister Dharmendra Pradhan has said as India looks to end its foreign oil dependency. Pradhan added that the current fiscal model did not help raise output from nomination fields.

To this point, higher revenue offered to the government from the oil and gas production has been the decisive factor for winning a block. However, the policy has not boosted domestic oil and gas production. A new exploration licensing policy offering independence of marketing and pricing for gas producers, and a higher gas price for output from frontier fields have been the pivotal changes made. "Most of the policy changes made in recent years apply to new fields or those that would start producing in future. We are thinking of offering fiscal incentives to nomination blocks, which is where the bulk of our production lies," petroleum and natural gas minister Dharmendra Pradhan said after launching the second round of the Open Acreage Licensing Policy (OALP) bid for the auction of 14 oil exploration blocks for prospecting of oil and gas.

The country has also been unable to attract interest from international oil majors in licensing rounds since 1990 despite the fiscal terms being eased.