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Friday, Feb 09, 2007
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Business Daily from THE HINDU group of publications Friday, Feb 09, 2007 ePaper |
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Petroleum Government - Policy
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Largest auction Unexplored States like Jammu and Kashmir may be offered in the seventh round of NELP. Government expects to sign the production-sharing contract with the winners of the block in March first week.
Consortium Approach
Bids were received for 52 blocks of the 55 put on offer, three deepwater blocks did not receive any bids. Of the 24 blocks, which ONGC has won as an operator, 12 are deepwater, two are shallow offshore, and 10 onland. In addition to 24 blocks, ONGC has also bagged a block in shallow offshore where Cairn Energy is an operator. The State-owned explorer had bid for most of the blocks adopting a consortium approach. All the seven blocks won by Reliance Industries, which went alone, are deepwater blocks. The other winners include Oil India Ltd and partners (six blocks), GSPC and Naftogas (three each), Santos and Essar Oil (two each), and Focus, Petrogas, Cairn Energy, Prize Petroleum and Geoglobal getting one each.
Expected Investment
The latest round of NELP saw apprehensions raised on `extreme financial bids' where the Government's share of profit on petroleum starts tapering down to 1 or 2 per cent from a high of 98 per cent as the exploration progresses. Asked about the 19 blocks that received such financial bids, the Petroleum Secretary, Mr M.S. Srinivasan, said: "The Government decided to stick to bid evaluation criteria announced earlier. NELP-VI has thrown up a pattern of bidding and we will try to address that in the next round." Speaking to newspersons after the Cabinet nod, Mr Srinivasan said the Government was expecting the winners to invest $6 billion in the initial five years of the exploration phase lasting till 2012. "The success of NELP-VI has been resounding and based on this conviction we will come out with NELP-VII in mid-April," he added. Under the latest round more weight has been given to the fiscal package to the Government unlike in earlier rounds when the focus was on the work programme. On the issue of whether the past performance of the companies would be one of the criteria for selecting the bidders, Mr Srinivasan, said, "We need to define past performances of the companies. The seventh round will address this also."
Production-sharing
Under NELP-VI 165 bids were received from domestic as well as global companies for exploration rights. In total there were 21 deepwater blocks, six shallow water blocks and 25 onland blocks of the 52 that received bids. The bids were opened on September 15 last year. Out of the 52 blocks for which bids were received 39 blocks received multiple bids and 13 got single bids. The round was launched on February 23 last year offering 55 blocks covering an area of 3.52 lakh square km. Mr V.K. Sibal, Director General, Directorate General of Hydrocarbons (DGH), said 70-80 blocks, including the unexplored States like Jammu and Kashmir may be offered in the seventh round of NELP. The Government expects to sign the production-sharing contract with the winners of the block in March first week.
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