'Deep-water blocks behind poor Nelp show'

Q&A: AJAY ARORA

Shouldn't the investment commitment of $3 billion under Nelp-VII have been higher given that oil prices are at a record high?

In comparison to the investments in earlier rounds, the Nelp-VII rounds saw lower commitments. This seems to have been primarily driven by a lower interest in deep-water blocks, where investment levels are very high. As far as onshore and shallow offshore is concerned, the work commitments appear to be quite competitive.

How would you compare this bid with the ones taking place internationally?

The bidding round in Indonesia, which is currently under way, has 21 regular tender blocks and five direct-offer blocks (where select companies will have the first right of refusal).

In Brazil, the process is similar to India, where there are no direct-offer blocks. Brazil has, however, witnessed considerable participation by foreign companies and in Round 9, out of the 36 winning companies, 16 were foreign players.

Signature bonus is an additional biddable item in Brazil. In other countries such as Egypt, Mozambique and Libya, national oil companies have what are called back-in rights (the right to get a stake in a block where there is a discovery), similar to our earlier (pre-Nelp) regime. India scores high on the transparency of the process, attractiveness of the fiscal terms and the fact that there are no signature bonuses to be paid.

Do you think the blocks on offer were not attractive?

The blocks on offer were a mix of basins and type