BHP Billiton may review exit plan from India, says Moily

Oil minister says Kelkar panel to submit interim report by December; decision on RIL's bank guarantee issue in 10 days

The government is keen on wooing back mining giant BHP Billiton, which had decided to exit India last month, giving up nine of its 10 exploratory blocks. Petroleum Minister M Veerappa Moily told analysts and exploration & production operators (E&P), at a dinner meeting on Monday evening, "BHP Billiton is prepared to continue if ONGC (Oil and Natural Gas Corporation) takes up some issues."

Moily, however, did not give details about the issues, except looking at ONGC Chairman Sudhir Vasudeva, who nodded in approval. Moily's statement comes barely a couple of months before the government is set to launch the 10th round of auctions under the New Exploration and Licensing Policy (NELP).

The Anglo-Australian energy major had last month surrendered nine oil exploratory blocks with an estimated reserve of 10 billion barrels of oil equivalent. The company in a statement, issued last month, said, "The decision to relinquish the blocks was the result of an exploration portfolio review and the inability to carry out exploration work in these blocks."

BHP had been awarded six blocks in the seventh round of auctions under the NELP, and three under the eighth edition. While it held 26 per cent interest in the six blocks awarded in the seventh round, it held 100 per cent in the three blocks awarded during the eighth auction round.

Due to objections from the Department of Space and the defence ministry, BHP has not been able to commence exploration work on the blocks.

Moily, who had a busy day in the country's commercial capital spearheading the first of its kind interaction with financial analysts, said he could see a convergence of minds between the ministry and E&P operators. "But the question is things needed to be speeded up. When we can run, why should we walk?"

Moily said after more than a two-year hiatus, India will launch auction of oil and gas blocks in January. The last round, the ninth under the NELP, was held in 2011 when 74 bids were received for 33 out of the 34 blocks on offer.

In his brief address, Moily also laid out the ministry's plans for the next few months for the sector.

The minister said the Vijay Kelkar Committee, appointed to prepare a road map for enhancing domestic production of oil and gas to reduce the nation's import dependency by 2030, will submit its interim report by the end of December 2013.

Moily wants to cut down India's reliance on oil imports to half. India currently imports 80 per cent of its oil needs and about half of its natural gas needs.

In yet another significant push forward, Oil Secretary Vivek Rae said India would soon have its National Data Repository (NDR) centre, the tender for which will close in three months. The government had amended Rule 19 of the Petroleum and Natural Gas rules to enable DGH to obtain all data from various operators/licensees, which could be disclosed to the prospective bidders as and when required under the open acreage system.

Speaking on the arbitration issue with Reliance Industries, the minister said the so-called dispute with the private sector major was being blown out of proportion and that a decision on RIL's bank guarantee issue would be taken in 10-12 days. The ministry recently imposed an additional penalty of $792 million on Reliance Industries for missing the target for production of natural gas from its KG-D6 block, taking the total fine imposed on it since 2010-11 to $1.797 billion. The ministry is going to disallow a certain amount of cost recovery for the company every year, until, of course, the arbitration process on this is over.