The Hindu Business Line : 20 blocks on offer — Net worth norm for NELP-V bidders cut

Mr Mani Shankar Aiyar, Minister for Petroleum & Natural Gas, with Mr S.C. Tripathi, Secretary, Petroleum & Natural Gas, addressing a news conference in the Capital on Tuesday. — Kamal Narang

New Delhi , Jan. 4

THE Government has cut the net worth criteria from $1 billion to $500 millionfor prospective bidders seeking to explore oil and gas in 20 blocks under the fifth round of New Exploration Licensing Policy (NELP-V).

Besides, to provide marketing stability to companies, the Government has decided to exercise the option to take its profit share of natural gas in cash or kind for a block of five years instead of such option being made every year as in the previous four rounds of NELP bidding.

In order to encourage small and medium size investors, companies with net worth of $500 million or more will not be required to give a bank guarantee towards minimum work programme commitment in respect of on-land and shallow water blocks.

The bidding for NELP-V was launched here on Tuesday by the Union Minister of Petroleum & Natural Gas, Mr Mani Shankar Aiyar. The 20 blocks on offer under NELP-V comprise six deep-water, two shallow water and 12 on-land blocks covering a sedimentary area of around 1,09,210 sq km. Out of the 20 blocks, 12 fall in Andhra Pradesh, Arunachal Pradesh, Assam, Gujarat, Maharashtra, Rajasthan, Tamil Nadu and Uttar Pradesh while eight of the blocks on offer were new exploration blocks.

Addressing a press conference, Mr Aiyar said that the NELP-V bidding would provide an attractive investment opportunity particularly in the back drop of huge oil and gas finds made by Reliance and Niko Resources Ltd in Krishna Godavari deep-water, Cairn Energy in Rajasthan and Reliance in the North East coast off-shore. He noted that since the launch of NELP in 1999, the gas reserves in the country had risen by 50 per cent.

The Minister expects an investment of nearly $1 billion in the hydrocarbon sector in NELP-V. On previous occasions, each round of NELP had attracted nearly $1 billion investment in the exploration sector.

The Government will hold roadshows in London, Dubai, Houston, Calgary and Moscow to market the blocks. Simultaneously, ONGC will be offering farm-in opportunities in five deepwater blocks including three in KG basin, one in Kerala-Konkan and one in Gujarat on NELP terms.

ONGC is also offering 19 offshore fields, on service contract through international competitive bidding, Mr Aiyar added. The bidding for NELP-V will close on May 31.

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