The exploration blocks were awarded from 2008 to 2010 under the Indian government's new exploration licensing policy, known as NELP, India's Livemint newspaper reported Monday.
The report said BHP Billiton, based in Melbourne, Australia, will continue to explore a deepwater field in the Mumbai basin in which it signed a production-sharing contract in 2012 with the government, along with the United Kingdom's BG Group Plc. The two companies have equal stake in the block.
"BHP Billiton has exited all its NELP blocks [other than the one with BG Group] because of delays in defense clearance," the newspaper quoted an unnamed source familiar with the decision, as saying.
Indian infrastructure and energy-focused conglomerate GVK has a majority stake in seven of the 10 blocks.
GVK acknowledged in its most recent annual report "further exploration has hit a roadblock" in the blocks it co-owns with BHP.
"The management . . . after careful consideration of the process and time being taken by the authorities for clearances is of the firm view to wait and watch before infusing any further funds into this project," GVK said in its report.
BHP's decision was confirmed by a petroleum ministry official.
"There was a pending issue with the ministry of defense and no full-scale clearance was given," the official was quoted as saying in the Livemint report. "BHP was raising issues of blanket clearance."
Data from India's Ministry of Petroleum and Natural Gas show while the Indian government has allocated exploratory rights for 249 fields since the January 1999 launch of NELP, just six blocks have started production.
India had 5.5 billion barrels of proved oil reserves at the end of 2012, the U.S. Energy Information Administration said.
India, the fourth biggest consumer of energy in the world, imports 80 percent of its crude oil and 25 percent of its natural gas requirements.
"India is significantly dependent on foreign oil and the government wants to enhance interest from foreign players to produce more here," Arvind Mahajan, head of energy at KPMG India, told The Financial Times. "But clearly there are delays happening, even though the government says it is working overtime to try and address them."
A report in India's Business Standard newspaper in August noted the first round of NELP auctions offered 48 exploration blocks, but the ninth round in 2012 offered only 14. Furthermore, of the $20 billion in investment recorded in the last five years, 2011-12 saw the least, only $1.86 billion due to what the newspaper referred to as a "ministry of defense embargo."