20 oil blocks opened for bids

Blocks may attract an investment of $1 billion from PSUs and private firms.

The government today put 20 oil and gas exploration blocks for bidding under the fifth round of new exploration and licensing policy (NELP-V). The blocks include six deepwater, two shallow-water and 12 onshore ones, Petroleum Minister Mani Shankar Aiyar said here today.

In addition, Oil and Natural Gas Corporation (ONGC) will offer farm-in opportunities in five deepwater blocks, including three in the Krishna-Godavari Basin and one each in the Kerala-Konkan offshore and Gujarat-Kutch on NELP terms.

The criteria for bidding for the blocks have been relaxed with the government deciding that companies with a net worth of $500 million or more will not be required to give bank guarantees towards minimum work programme commitment for on-land and shallow-water blocks. The threshold, in the earlier rounds, was $1 billion. This will make more companies eligible to bid.

The government will exercise its option to take a share in profit gas in cash or kind for a block after five years instead of the option being exercised every year in the earlier rounds.

The blocks are estimated to attract an investment of $1 billion from public and private sector firms. Over $2.53 billion have already been invested in the blocks awarded in the first four rounds of bidding.

Speaking at a press conference, Aiyar said bids would be evaluated by giving 60 per cent weight to the work programme. The weight for fiscal package will be 30, financial capability four and technical capability six.

Of the deepwater blocks, two each are on the east and the west coast and two in the prospective Andaman area. The last date for bidding is May 31, 2005.

The shallow-water blocks are on the west coast while the 12 on-land blocks are spread across eight basins "" Assam, Arakan, Cambay, Rajasthan, Kaveri, Ganga valley, Vindhya, Deccan Syneclise and Krishna Godavari.

The directorate-general of hydrocarbons will conduct roadshows to attract investors in Delhi (January 18), London (January 20-21), Dubai (January 24-25), Houston (January 31 and February 1), and Calgary (February 3-4). Digital data rooms are being set up in Delhi, Houston, London, Calgary and Dubai.

"Domestic crude oil production is targeted to rise to 50 million tonnes by 2025 from the current plateau of 33 mts," Aiyar said.

However, the over-5 per cent increase in the demand for petroleum products is likely to outpace the incremental production planned, and India's self-sufficiency ratio would fall to 15 per cent.

Scouting for oil

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• The 20 blocks, under the fifth round of the New Exploration Licensing Policy, cover an area of about 109,210 sq km (42,170 sq miles) and comprises six deepwater blocks, two shallow water and 12 onshore blocks
• The 12 onshore blocks are in nine states and include Maharashtra for the first time under the NELP, the government said in a statement
• This round has been launched after oil and gas discoveries made by Reliance Industries Ltd. and Niko Resources Ltd. in Krishna Godavari deepwater in the south and by Cairn Energy in the northwestern state of Rajasthan