Govt may launch Nelp-IX in July

The government is planning to launch the ninth round of the New Exploration Licensing Policy (Nelp-IX) in July this year to auction up to 45 oil and gas blocks. Some of these blocks will be from the eighth round for which no bids were received.

“We have identified a number of blocks and sought inter-ministerial clearances from the Ministries of Environment and Forests, Defence and External Affairs, Department of Space and various state governments. We hope to launch the ninth round in July and complete the award of blocks by the last quarter of the current financial year. Some of the blocks from the eighth round will also be put under auction,” S K Srivastava, director general in the Directorate General of Hydrocarbons, told Business Standard.

Of the 70 blocks offered under Nelp-VIII, only 36 attracted bids. The government finally awarded 33 blocks, half of which went to public sector explorer Oil and Natural Gas Corporation. It had also offered 10 coal-bed methane blocks last year under the CBM-IV round. However, no CBM blocks will be offered along with the ninth round of Nelp. “CBM blocks are identified by the coal ministry based on perspective coal mining plans. This year, no blocks have been identified,” he said.

“The economic situation and investor sentiment is better now. Crude oil prices have also improved and stabilized in the range of $70-80 per barrel. We believe that the ninth round will draw a good response,” Srivastava said. The petroleum ministry will also organise roadshows within the country and outside.

When asked if gas discoveries under the ninth round of Nelp would get a seven-year income tax holiday, as was committed for the eighth round, Srivastava said the government needed to take a call on it. Finance Minister Pranab Mukherjee, in his Budget for 2009-10, announced a seven-year income tax holiday for production and sale of natural gas from blocks awarded under Nelp-VIII.

Since 1997, when the government launched the Nelp, it has awarded 239 blocks. Out of these, 68 discoveries of oil and gas have been made in 19 blocks, establishing reserves of 500 million tonnes of oil and oil-equivalent gas. An investment of over $10 billion has been committed in the first eight rounds of Nelp.