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Govt may award blocks under NELP IX by next March

Press Trust of India  |  New Delhi 

The government is likely to award oil and gas blocks offered for bidding in 9th round of New Exploration Licensing Policy (NELP) by March next year, a good eight month behind schedule.

"Some blocks [offered in NELP-IX] were held up due to security issues. By March next year, most of the blocks will be awarded," Sudhir Bhargava, Additional Secretary, Ministry Of Petroleum and Natural Gas said here today.

The government had offered 34 blocks in NELP-IX last year. Oil Minister S Jaipal Reddy had at the close of bidding on March 28, 2011, stated that the blocks would be awarded and contracts signed with winners in four months.

"We were looking at [signing PSCs] by December," Bhargava said pointing to Defence Ministry raising objections to offer of some blocks that fall in Naval exercise areas.

The government had in the previous eight rounds awarded 235 areas for exploration and production of oil and gas.

While Bhargava did not say how many of the 33 blocks that were bid for in NELP-IX would be awarded, officials in his ministry stated that a high-level panel of secretaries has recommended awarding of only 14 areas.

Empowered Committee of Secretaries (ECS) recommended award of only 14 areas after three areas in Mahanadi basin off the Orissa coast had to be withdrawn as they fell in Naval firing/exercise areas and bids for several others had to be rejected due to various reasons.

The panel recommended award of two shallow water and two onland blocks to consortia led by ONGC. State-owned OIL led consortia was adjudged winner for two onland blocks in the Assam-Arakan basin. Deep Energy walked away with two Cambay basin blocks while Focus Energy beat Reliance Industries to bag an area in Rajasthan.

The remaining five blocks were recommended for award to companies like Sankalp Oil and Natural Resources, Pratibha Oil and Natural Gas Pvt Ltd and Pan India Consultants.

The government had offered eight deepsea blocks, seven shallow water areas and 19 onland blocks for bidding in NELP-IX. One shallow water block did not receive any bid.

The ECS recommended rejection of single bids for eight blocks where profit petroleum offered to the government ranged between 6.6% and 6.7%.

It sought assessment of net worth of top bidder for three blocks in Cambay and Rajasthan before awarding them.

ECS suggested rejecting bids by RIL and state-owned Oil and Natural Gas Corp (ONGC) for the Andaman sea block as they had offered "very low" profit share to the government.

It also wanted the bid by a consortium of ONGC-OIL and GAIL for deepsea block GS-DWN-2010/1 and that of ONGC-OIL-BPRL for Kerala-Konkan deepwater block KK-DWN-2010/1 also rejected as they offered very low profit share.

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First Published: Mon, December 05 2011. 18:04 IST