The Hindu Business Line : Cabinet okays two oil exploration contracts

THE Cabinet Committee on Economic Affairs (CCEA) today recommended bidders for award of two remaining blocks - one each in Assam and Arunachal Pradesh - under the fifth round of New Exploration Licensing Policy (NELP V).

The consortium comprising Jubilant Oil, Jubilant Securities, Gujarat State Gas Corporation and GAIL have been recommended for the block in Assam. The block in Arunachal Pradesh has been awarded to National Thermal Power Corporation-Canoro Resources Ltd-GeoPetrol International consortium.

The Government had recently signed the product sharing contracts (PSCs) with companies, which have been awarded 18 blocks out of the total 20 under the NELP V. The bidders for the blocks AA-ONN-2003/1 (in Assam) and AA-ONN-2003/2 (in Arunachal Pradesh) were not recommended earlier due to certain legal issues, the Union Finance Minister, Mr P. Chidambaram, said at the official briefing.

The CCEA also approved that the provisions already incorporated in the letters for award of the 18 blocks be incorporated in the letters for award and the PSCs for these two blocks also. This would be to the effect that in case contractors fail to complete the minimum work programme (MWP), they would carry out equivalent or additional or substituted exploration programme with Government approval in the blocks within a stipulated time frame in the contract. Failing which, they will pay equivalent money, as determined to the Government, Mr Chidambaram said.

The cost estimates given by the recommended bidders for their MWP in all three phases will be taken as the benchmark for the purpose of allowing cost recovery, he said. The PSCs with the awardees will be finalised and singed with the approval of the Ministry of Petroleum and Natural Gas.

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