The Hindu Business Line : Govt kicks off oil blocks bidding — 55 under NELP VI, 10 for coal bed methane

The Petroleum Ministry today kicked off the sixth round of New Exploration Licensing Policy (NELP-VI) and the third round of Coal Bed Methane (CBM-III).

While under the NELP-IV around 55 blocks would be on offer comprising 24 deepwater blocks, 6 shallow water blocks and 25 on-land blocks. The third round of CBM offers 10 blocks.

Stating that the implementation of NELP rounds has given a boost to exploration efforts in the country, with increasing areas including deepwater coming under exploration, the Minister for Petroleum and Natural Gas, Mr Murli Deora said: "After five rounds the area under exploration has increased more than three times and reserve accretion has already been around 600 million tonnes and $5-billion of investment commitment received."

The 55 blocks cover a sedimentary area of about 3.55 lakh sq km.

The 25 onland blocks fall in Andhra Pradesh, Bihar, Arunachal Pradesh, Assam, Gujarat, Madhya Pradesh, Maharashrta, Mizoram, Rajasthan, Tamil Nadu, and Uttar Pradesh.

The six shallow and 24 deepwater blocks fall in Western, Eastern and Andaman offshore.

Simultaneously, 10 blocks in Andhra Pradesh, Chattisgarh, Madhya Pradesh, and Rajasthan, and one each in Jharkhand and West Bengal for exploration and production of CBM under the third round are being offered.

Cos' concern

Further, addressing the concerns expressed by the exploration and production (E&P) companies in NELP-V and learning from experience, the Government has factored in the views of various stakeholders while preparing the bid documents for NELP VI and CBM III, Mr Deora said.

While the bidding system has been made more sophisticated on the basis of inputs from stakeholders, the blocks have been categorised on the basis of geological perceptions and tailor-made bid evaluation criteria have been framed accordingly, he added.

To discourage speculative bidding on the basis of aggressive work programme, greater emphasis has been placed on the fiscal parameters and weightage has been given to the technical capability of the designated operator only.

Besides, the relinquishment norms have been simplified and the exploration programme divided into two phases, rather than three, according to the Petroleum Secretary, Mr M.S. Srinivasan.

The previous rounds laid more emphasis on work programme - the commitment by the bidder to do seismic survey and drill well - which led to highly exaggerated bidding.

On the success of NELP rounds, he said that NELP has seen major discoveries by Reliance, ONGC, and GSPC.

Reliance has also discovered 3.7 trillion cubic feet (TCF) of gas below the coal seams in the CBM blocks offered to it in the earlier rounds, while ONGC has established 1.4 TCF of CBM reserves.

Road shows

The road shows for NELP-VI have been planned at New Delhi on March 10, to be followed by London, Houston, Perth, Kuala Lumpur, Dubai, Calgary, and Rio de Janeiro, respectively.

The road shows for CBM-III have been planned at New Delhi on March 3, to be followed by Houston and Brisbane.

In order to provide sufficient time to interested companies in view of the larger number of blocks and to review and buy data and finalise strategic alliances, companies and investors have been provided more time; the bid closing date for NELP-VI is September 15.

The production sharing contracts would be signed within four months. The bid closing date for CBM-III is on June 30.