The Hindu Business Line : Next bidding round for oil blocks may begin in May

Kolkata April 17 The Director-General of Hydrocarbons, Mr V.K. Sibal, on Tuesday said that India may flag off the next bidding round (NELP-VII) for oil and gas exploration blocks by May. A total of 60 blocks may be auctioned in the coming round as against 55 in NELP-VI.

Though progress is made in data collection, it is still not sufficient to introduce an open acreage bidding system in the country. Unlike NELP where the regulator identifies the blocks with defined geographical limits, in open acreage system the investors identify the area of their future exploration activity and bid accordingly.

"We are expecting NELP-VII to be opened within a month or two," Mr Sibal told newspersons. On Kerala-Konkan basin, which did not receive any bid during the last round he said, "We had little information to offer on the sedimentation in the basin during the last round last year. However, this year we have access to relevant information on Kerala-Konkan and are expecting the basin to attract investments."

Though Mr Sibal did not tread into further details, sources said that the ratio of on-land blocks may go up in NELP-VII. Apart from Rajasthan, where Cairn India struck major oil reserves, a number of onshore blocks may be offered in Maharashtra, Himachal Pradesh, Haryana, Punjab, Bihar and Bengal. Most of these States had little presence in earlier rounds.

While the number of offshore blocks may remain the same, larger number of deepwater blocks may be auctioned. India auctioned 30 offshore including 24 deepwater blocks in NELP-VI.

In the off-shore, larger number of blocks may be opened for exploration in Kerala-Konkan, Kutch-Saurashtra and Laxmi basins (located in the north of Mumbai Offshore) in the West coast.

The preferred destinations, however, are expected to be the offshore blocks in the Eastern coast. This includes, Krishna-Godavari, Cauvery, Mahanadi and North Eastern Coast (NEC) where major discoveries were reported in the recent past.

The Directorate-General of Hydrocarbons is particularly bullish about NEC and feels that the basin may have major surprises in store. It may be mentioned that Reliance has reported strikes in all the eight exploratory wells drilled in NEC-25 block so far.

The upstream regulator is also bullish on the possibility of gas reserves in the Andamans. "There is tremendous investor interest on the Andamans. However, non-availability of facilities for evacuation of natural gas may be coming in the way of investment," Mr Sibal said while addressing an Energy Summit on Tuesday.