Indian oil hunt may draw $7 bn

Chevron, Exxon among interested global majors.

India expects a sizeable $7-billion investment in oil exploration by 2008 from global majors like Exxon Mobil and Chevron. For the first time, these firms have shown interest in oil exploration in the country.

As many as 55 oil and gas blocks are on offer in the sixth round of the National Exploration Licensing Policy (NELP), for which bids have to be sent in by September.

In comparison, an investment of $1.7-2 billion has been committed for the 20 blocks offered during the previous NELP round last year. That round saw British Petroleum, Cairn and British Gas among 26 companies picking up blocks in the country.

"For the first time, all the major oil companies have exhibited interest in acquiring data packages of India's sedimentary basins. Transparent bidding conditions and a better regulatory framework in India with the setting up of the petroleum regulatory board for the downstream sector are important factors in this," Petroleum and Natural Gas Minister Murli Deora said today. The petroleum regulatory board will be set up in six months.

"The extent of response can be gauged from the fact that we have got Rs 40 crore by selling data this time, compared with Rs 20 crore earned during the previous round. We expect to sell about Rs 100 crore worth of data by September, when the bidding ends," Deora said.

Deora also said during his interaction with various foreign companies, it emerged that many of them were also interested in investing in greenfield refinery projects like Bina.

The petroleum ministry has recently concluded road shows in London, Houston and Brisbane to promote oil and gas blocks under NELP-VI and under the third round of coal bed methane exploration.

Deora said nearly 20 million standard cubic metres of gas a day were expected from coal seams from the next year.

On the fiscal front, Deora said there was still no consensus on the Rangarajan Committee recommendations and a ministry delegation was expected to meet Finance Minister P Chidambaram on the issue next week.

"The fiscal package for the petroleum sector my be announced in May," MS Srinivasan, petroleum secretary, said.

He added that the ministry had also taken up the issue of service tax exemption on exploratory activity and that the issue was still open, even though an announcement was made during the Budget.

Srinivasan said the ministry had drawn up a list of core exploration activities like surveys, logging and data-acquisition.