Government unveils 10th round of Nelp

Still undecided on revenue share change, given Rangarajan and Kelkar panels' diverse views; to take a view soon

The Union government unveiled on Sunday the blocks for its 10th round of oil and gas exploration auction. At least 46 of these would be offered for domestic and foreign investors.

The launch was part of Indian industry’s flagship event, Petrotech 2014, at which Prime Minister Manmohan Singh said adequate supply of energy at an affordable price was critical for economic growth.

Later, petroleum and natural gas minister M Veerappa Moily announced the 46 blocks, covering 166,053 sq km. These comprise 17 onland ones, 15 shallow water and 14 deepwater blocks. “The number to be offered might go up to 60, after all inter-ministerial clearances are received,” Moily said.

This 10th round of the New Exploration Licencing Policy (Nelp-X) would be the second highest after NELP-VI in which 52 blocks were offered. Those on offer now are across 13 basins. The largest number during this round would be from the Cambay basin (nine), followed by Mumbai (seven) and Andaman (five).

However, it is clear whether the government would be following a revenue sharing model, compared with a production sharing contact. “We had gone for a revenue sharing model, based on the Rangarajan panel’s suggestions. However, with Vijay Kelkar (chairing a committee on the subject, too) now suggesting continuing with a PSC regime, we are taking a view on this and would come out with a detailed policy soon,” Moily said.

Inviting global majors to India, the Prime Minister said, “We are encouraging domestic and global companies to explore potentially hydrocarbon-rich areas in the framework of a stable and enabling policy environment.”

Bidders would be able to enjoy a uniform licencing policy for all hydrocarbon resources as part of the new rounds.

The PM added, “India is the world’s seventh largest energy producer, accounting for 2.5 per cent of the world’s total annual energy production.

However, it is the fourth largest energy consumer and is slated to become the third largest by 2020. This implies we need to increase the energy supply by three to four times over the next two decades.”

So far, 128 hydrocarbon discoveries have been made in 42 Nelp blocks. Till now, an investment worth $21.3 billion (Rs 1.3 lakh crore) has been made on Nelp blocks over the past nine rounds.