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| India relaunches largest auction of oil, gas areas |
| Press Trust of India / Mumbai Aug 08, 2009, 12:48 IST |
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India today relaunched its largest ever auction of oil and gas exploration areas, aiming to attract $3-4 billion investment towards boosting energy security.
Petroleum Minister Murli Deora kick-started the offer of 70 oil and gas exploration areas in the 8th edition of New Exploration Licensing Policy (NELP) and 10 coal bed methane (CBM) blocks with the first roadshow here.
"NELP can be portrayed as India's success story in our endeavour to achieve self-sufficiency in hydrocarbons," he said at the promotional roadshow.
Under NELP, 71 oil and gas discoveries have already been made in 21 exploration blocks by accretion of in place hydrocarbon reserves of more than 600 million tonnes of oil equivalent, he said.
"Major natural gas production in KG basin commenced from April. With this, the gas production in the country would be doubled, and in monetary terms it would be about $42 billion."
Total committed investment in NELP rounds for exploration so far is around $10 billion, out of which $5.3 billion in exploration has been made. Further, $6.6 billion will be invested towards development of the Exploration and Production sector.
Deora said the last date of bidding for the nation's largest ever auction of oil and gas blocks is October 12.
Fearing investor backlash on ambiguity over the tax holiday for natural gas, the government had on April 17 deferred the promotional roadshows.
The Finance Ministry had in 2008-09 Budget scrapped the seven-year tax holiday or exemption from payment of income-tax on natural gas production.
Though oil and gas naturally occurred together and a single well could be producing both, the incentive was restricted only for crude oil production.
The move drew flak from oil majors who kept away from the previous NELP-VII round that closed after the announcement. Asia's third-largest energy consumer is aiming to cut oil imports and has till now awarded 203 blocks in the previous seven rounds with over $11 billion committed as exploration spend.
Besides, 23 blocks have been awarded in the previous three CBM rounds. More than six trillion cubic feet reserves have already been established in four CBM blocks.
Since its advent in 1999, NELP has made 68 oil and gas discoveries in Cambay onland, North East Coast and Krishna Godavari deep-water areas totalling over 600 million tonnes of reserves.
Worldwide spending on oil and gas exploration may drop 12 per cent in 2009 to $400 billion, Barclays Capital Research has stated.
India had offered 57 blocks in NELP-7 last year and awarded 44 to companies like BHP Billiton and Oil and Natural Gas Corp (ONGC). In the first six rounds, 162 areas with an investment commitment of $8.33 billion were awarded.
Of the total committed investment of $8.33 billion received in the first six rounds of NELP, $3.887 billion had already been spent by oil and gas companies till March 2007.
Of the $8.33 billion promised investment, the largest commitment of $3.32 billion was received in NELP-6, where 52 out of 55 blocks on offer were grabbed.
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