Moily to meet investors on Monday

Major merchant bankers and MFs investing in oil firms likely to take part

To push the next round of the New Exploration Licensing Policy (Nelp) for the petroleum sector, minister M Veerappa Moily will conduct an investors’ meet in Mumbai on Monday.

He will have separate meetings with upstream companies, fund managers, rating agencies and media editors. Major merchant bankers and mutual funds investing in oil companies are also expected to take part in the conference.

The 10th round, set to begin in January, would be the second highest offering of blocks since the advent of Nelp in 1999, with 86 blocks up for bids. Of the blocks being considered for offer, 25 are deep-water ones, 20 in shallow water and 23 are on land. Another 18 would be put for offer by March. The petroleum ministry says it has got initial clearances for 58 of these blocks from the environment and defence ministries. It has set up an experts’ committee on blocks that could face hurdles from the latter two.

“The aim (of Monday’s meet) is to boost investor sentiment, especially in the upstream sector. It will also be a preparatory round for the next Nelp round,” Vivek Rae, petroleum secretary, told Business Standard.

A senior official said, “Moily wants to create a positive mood among the investors, highlighting the steps being taken by the ministry.”

During the previous nine rounds, the ministry awarded 254 blocks for exploration of oil and gas. However, the past few got minimal response from global majors. When asked about this, Debashish Mishra, senior director of Deloitte in India, said, “There seems to be disinterest among global investors. India was never known for having huge potential for oil and gas. Other than Bombay High and the recent discoveries in Barmer, there were no noteworthy discoveries. Promises of large gas finds have not met actual output.”

The major roadblock in attracting foreign investors was related to lower potential on reserves, policy issues and delay in getting clearances, he said.