The Hindu Business Line : Govt awards 18 blocks under NELP; ONGC, RIL emerge as major players

Of the 20 blocks that were offered under the NELP V, the Government on Monday awarded 18 blocks, while deferring decisions on two blocks in the Assam-Arakan region — AA-ONN-2003/2 and AA-ONN-2003/3.

The total investment in the three phases of exploration is estimated at $867 million. The first phase itself will involve an investment of $380 million.

"The Cabinet Committee on Economic Affairs (CCEA) today decided to award 18 blocks under the fifth round of NELP," the Union Finance Minister, Mr P. Chidambaram, told newspersons after the Cabinet meeting. The decision on two blocks was deferred due to legal problems and a final view will be taken shortly. Nine bidders had bid for the Assam-Arakan blocks.

Of the six deepwater blocks offered, RIL has bagged four blocks — two independently and two jointly with Hardy Exploration & Production India Inc and Niko Resources Ltd, respectively. ONGC got the remaining two blocks — one independently and second in collaboration with ENI India Ltd and GAIL India.

Both the shallow water blocks have been awarded to ONGC. While Cambay Basin block was won by ONGC independently, Gulf of Saurashtra was in collaboration with Cairn Energy.

Cairn Energy was awarded four onland blocks, which it had bid in collaboration with ONGC and ENI India Ltd. The Oil India and HPCL combine has been awarded the Assam-Arakan block.

Further, in case of the Cambay Basin block, which was awarded to Reliance Industries, a condition has been imposed that it will maintain the coordinates as given in the information docket/data package. While Niko Resources was awarded one on-land block, Gujarat State Petroleum Corporation, GAIL, Jubilant Capital and Geo Global Resources were jointly awarded a block in Cambay Basin — the CB-ONN-2003/2. Geo Global Resources was awarded the DS-ONN-2003/1 block. Phoenix Overseas and Birckbeck Investment Ltd were awarded a block in Rajasthan and the second block in Rajasthan was given to the ENI India, ONGC and Cairn consortium.

NELP V was launched on January 4 this year, offering 20 blocks — six deepwater blocks, two shallow water blocks and 12 on-land blocks.

The 20 blocks cover a sedimentary area of about 1,09,210 sq. km. The on-land blocks were in Andhra Pradesh, Arunachal Pradesh, Assam, Gujarat, Maharashtra, Rajasthan, Tamil Nadu and Uttar Pradesh. Maharashtra was included for the first time for exploration under NELP V.

The bids closed on May 31 and around 69 bids for 20 blocks (18 bids for six deepwater blocks, seven bids for two shallow water blocks and 44 bids for 12 on-land blocks were received.)

Further, to ensure that the winning companies fulfil the work commitment, the Production Sharing Contracts (PSCs) will provide that in case contractor fails to complete the minimum work programme (MWP) as bid for, the company would be required to carry out equivalent or an additional / substituted exploration work programme, failing which it would be required to pay the equivalent money to the Government.

Moreover, the cost estimates given by the successful bidders will be taken as a benchmark for the purpose of allowing cost recovery in respect of all the three exploration phases. The PSCs with the awardee companies will be discussed and finalised during next one month.

The contracts are expected to be signed by October 2. The Government will now initiate action to offer blocks in the next round.

A thorough review after intensive consultations with various stakeholders will be undertaken by the Government before the finalisation of the bid documents.

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