Govt launches bid for NELP VII, expects $ 3-3.5 bln investment

New Delhi, Dec 13 (UNI) The government today launched the seventh round of New Exploration Licencing Policy (NELP) for 57 blocks covering about 1.71 lakh sq km, and expects an initial investment of 3-3.5 billion dollars for exploration alone.

''Today we are launching the next round of oil and gas asset auctions,'' Petroleum Minister Murli Deora told reporters here.

This time, the government has offered the highest number of exploration blocks ever, Mr Deora said. Out of these acreages, nine are in shallow water, 19 in deep sea and 29 on land blocks.

The bid for the NELP VII will close on April 11, he said adding that the government will complete evaluation, award and signing of production sharing contracts in the next six months.

Mr Deora said with more liberal terms this time, many firms such as British Petroleum and British Gas, who did not participate last time, are expected to be a part of the auction this time.

''We expect an investment of about 3-3.5 billion dollars for exploration alone,'' Petroleum Secretary M S Srinivasan said here.

The development of E&P sector has been significantly boosted through NELP which permitted 100 per cent FDI and thus opened the sector for private and foreign investment, the minister said.

Mr Deora said in order to provide small and medium E&P firms, a level playing field and compete with big operators, a new type of blocks called 'Type-S' covering an area up to 200 kilometres has been introduced for the first time.

He added that they will be provided special dispensation in the form of waiver of technical capability criteria.

For deepwater blocks, advanced technology and operators having experience in deepwater will be encouraged as they require infusion of state-of-the-art technology and business practices.

''We have introduced a new consortium sub-criterion for deepwater blocks under technical capability parameter,'' Mr Deora said.

On government share of profit, he said petroleum will be biddable against two tranches of pre-tax investment multiple (PTIM) that is ''less than or equal to 1.500'' and ''equal to 3.500 or above.'' Other shares of profit petroleum would be worked out on a linear scale with a positive slope depending upon the exact PTIM achieved in each of the preceding year, Mr Deora said adding that this would ensure higher government share of profit petroleum with increasing PTIM.

In February last year, the government had awarded 52 blocks under NELP-VI. So far it has awarded 162 blocks which constitutes 44 per cent of country's sedimentary basins, under its new licencing policy which was introduced in 1999.

Before implementing the NELP, 11 per cent of country's sedimentary basin area was under exploration.

Currently, India imports 70 per cent of its crude oil requirement.

UNI