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Richa Mishra

The intention is to strengthen the bidding system based on experience and performance while the country is trying to graduate to an open acreage system

New Delhi , Nov. 5

THE Petroleum Ministry is set to fine-tune the New Exploration and Licensing Policy (NELP) to attract more exploration and production companies.

The Ministry is working on rationalising the exploration blocks so that there is not much of a difference in their size while tapping the unexplored potential of the country.

Indications are that the Ministry will offer smaller blocks under NELP 6, which is expected in January. Further, four- five blocks from the North-East of the country may also be offered under the new round.

The intent behind this initiative is to see that the norms are in sync with the requirements to be prescribed for the prospective bidders under NELP 6, the Director-General of Hydrocarbons (DGH), Mr V.K. Sibal, said.

At present, a bidder works out physical programme for the block, while the DGH decides the size of the block. This leads to certain discrepancies. Under the revised norms, the Ministry is trying to correct this, he said.

The process would be completed before the blocks are offered under new rounds, he told Business Line. "We have received feed-back from all the players in the sector and now are in the process of finalising the norms," Mr Sibal added. Stating that he would not call it a complete overhaul of the existing policy, the DGH said the rationale behind the process is to see how the norms can be improved. The intention is to strengthen the bidding system based on experience and performance while the country is trying to graduate to an open acreage system, he said.

Under NELP 6, the Ministry would like to see how more drilling can be done with good technological quality. The norms are expected to give maximum weightage to the technical capability of the bidders. Currently, the bid evaluation criteria policy emphasises more on the work programmes (seismic surveys and drilling activities) than the financial and technical competence of the bidders.

This often results in aggressive and speculative bidding by companies. Further, the Ministry would also ensure that deep onshore blocks and offshore blocks do not compete with each other. Future blocks would be offered under two categories based on their risk profiles, he explained.

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