The government will launch the ninth round of the New Exploration Licensing Policy (Nelp-IX), which will see an auction of around 35 oil and gas blocks, on October 18, with a road show in Mumbai. Some of these blocks could be from the eighth round, for which no bids were received.
“The date of launch has been decided. We will begin with a road show in Mumbai and then go for a series of domestic and international road shows to attract investors,” said a top official in the petroleum ministry.
The Directorate General of Hydrocarbons, the country’s upstream oil regulator, has identified 30-35 oil and gas blocks for auction. It is expected that the ninth round will be completed with the award of blocks in the last quarter of the financial year.
Of the 70 blocks offered under Nelp-VIII, which concluded last year, only 36 attracted bids. The government awarded 33 blocks, half of which went to public sector explorer Oil and Natural Gas Corporation (Ongc). It also offered ten coal-bed methane (CBM) blocks last year under the CBM-IV round. No CBM block would be offered along with the ninth round of Nelp. “CBM blocks are identified by the coal ministry, based on prospective coal mining plans. This year, no blocks have been identified,” the official said.
The economic situation and investor sentiment is better now. Crude oil prices have also improved and stabilised at $75-80 per barrel. The government is hopeful the ninth round will draw a good response.
When asked if gas discoveries under the ninth round of Nelp would get a seven-year income-tax holiday, as committed for the eighth round, the official 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 in Nelp-VIII.
Since 1997, when the government launched the Nelp, it has awarded 239 blocks. 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 Nelp rounds.