The Hindu Business Line : Govt may offer more onland blocks for exploration

The Union Government is likely to offer more on-land blocks for oil and gas exploration in the NELP-VII round. The area to be thrown open for exploration, however, may not see much of an increase.

While the total number of offshore blocks to be offered may remain at the same level of NELP-VI, a larger number may be open for exploration in the Kerala-Konkan, Kutch-Saurashtra and Laxmi basins in the west coast. Laxmi basin is located in the north of Mumbai offshore.

Offer Details

According to sources in the Directorate-General of Hydrocarbons (DGH), the offer details for NELP-VII are likely to be finalised by April 2007. The total number of blocks to be offered may be higher than last year.

It may be mentioned that a total number of 55 blocks including 30 offshore and 25 onshore were offered in the last round of bidding held in 2006. Of the offshore blocks 24 were in deepwater.

A total 22 blocks including 20 deepwater blocks were located in Cauvery, Krishna-Godavari and Mahanadi basins in the east coast. Responses too were heavily loaded in favour of the east coast. Out of the offerings in the west coast, three — two in Kerala-Konkan and one in Andamans — did not receive any bid.

Attractive Destinations

"In NELP-VII we are planning to offer more number of offshore blocks from the west coast, which was least represented in the last round," a DGH official said, adding that a substantial number of blocks may be offered in Kerala-Konkan, Kutch-Saurashtra and Laxmi basins.

Talking about responses in the offshore hunt, he said while KG and Mahandi basin may continue to be attractive destinations, Cauvery basin was likely to draw attention of the investors after the recent oil strike by Hardy Oil.

On onland offerings, the official said that apart from Rajasthan, where Cairn India struck major oil reserves, Maharashtra, Himachal Pradesh, Haryana, Punjab, Bihar and Bengal would feature prominently in NELP-VII. Interestingly, many of these States had little presence in earlier rounds.

DGH is bullish on prospects of Himachal Pradesh, Punjab (an extension of the gas bearing Punjab basin in Pakistan) and Bengal basins (extended up to Bihar) in drawing attention of exploration companies. "Unlike NELP-VI, the average size of on-land blocks to be offered in the next round may be smaller," the official said.