New norms for oil, gas search policy

The new round of National Exploration Licensing Policy (NELP) will see changes in the profit-petroleum sharing norms, whereby the government can stake its claim only once in five years.

Profit-petroleum is the government's share in oil or gas discoveries which can be claimed in cash or in kind. At present, the government claims its share annually.

The government also offered 10 blocks for coal-bed methane (CBM) exploration along with another 55 for oil and gas under the sixth round of NELP.

Petroleum Secretary MS Srinivasan said changes were introduced in the bidding norms to attract more players.

He said the changes included giving more weightage to the fiscal package than the works programme. "This is to discourage companies from aggressively bidding on the works programme," Srinivasan added.

In the earlier rounds, it was found that companies bagged blocks on the basis of ambitious works programme, which they did not honour later. In addition, within the works programme, the weightage on seismic surveys and that on drilling wells could not be interchanged.

Moreover, the technical capability of the operator, rather than the consortium as a whole, was to be taken into account. The financial capability would only be a qualifying criteria instead of an advantage in the bidding rounds.

Petroleum Minister Murli Deora said of the total blocks offered under the NELP-VI, 24 were in deep sea, six in shallow offshore and 25 onland blocks. Bidding opened on February 28 and closed on September 15.

He added that the 3.55 lakh sq m of area offered in this round was more than thrice the area offered earlier.

He added that the third round of the CBM was framed to attract participation in more challenging areas.

In the earlier two rounds, nearly 16 blocks were awarded. Roadshows for this round will be held in Delhi (March 10), London (March 20), Houston (March 23), Perth (March 20-31), Kuala Lumpur (April 5-6), Singapore (April 7), Doha (April 22), Dubai (April 23-24), Calgary (June 14-15) and Rio (June 19-20).