Award of contracts under the eighth round of the New Exploration Licensing Policy (Nelp) bidding for oil and gas blocks and the fourth round of bidding for coal bed methane (CBM) blocks will take another month. The empowered committee of secretaries (ECS) is yet to finalise the winning bids.
A senior petroleum ministry official said certain issues related to the bids were being discussed with the law ministry. “This will delay award of contracts,” said the official. The bidding had closed on October 12. The government had then said the contracts would be awarded in about three months.
Lanco Infratech, a part of the Lanco group, had last month expressed concern over reports of cancellation of provisional award of CBM blocks to a consortium led by Deep Ch4. Lanco had partnered with Deep for two CBM blocks in Orissa. It sought a formal clarification from the ministry. A meeting of the ECS in mid-December had decided that the Ruias-promoted Essar Oil be given three more CBM blocks and Australia’s Arrow Energy two. This was after it decided to reject the bids by the Deep-led consortium. The consortium was provisional winner in seven CBM blocks.
The delay points to reconsideration of its decision by the ECS.
The bids have been facing problems since the process started. There was poor response from exploration and production companies and no bids were received for 34 blocks. There were single bids for 20 blocks out of the 70 blocks on offer. In CBM auctions, there were 24 bids for eight blocks out of the 10 that were on offer.
Under the procedure, the ECS, headed by the petroleum secretary, clears the winning bids, which are then sent for approval of the Cabinet Committee on Economic Affairs. The process culminates in winning companies signing production-sharing contracts with the government.
The government-owned Oil and Natural Gas Corporation (ONGC) is expected to corner a maximum number of more than 14 blocks. According to the tentative list of awardees drawn by the Directorate General of Hydrocarbons, ONGC will be operator in about 14 blocks and will have participating interest in three more blocks operated by BG and Oil India Ltd.