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46 blocks 'ready for Nelp-X'; number may rise to 60

Monday, 13 January 2014 - 10:38am IST | Place: Greater Noida | Agency: DNA

The oil ministry has zeroed in on 46 onshore and offshore hydrocarbon blocks to be auctioned in the tenth round of the country’s New Exploration and Licensing Policy or Nelp-X, petroleum and natural gas minister Veerappa Moily said on Sunday at Petrotech 2014, an industry event.

The 46 blocks have already received statutory clearances. The number may go up to 60 after all inter-ministerial clearances are received. The blocks which have been finalised include 17 onland, 15 in shallow water and 14 deepwater blocks, covering an area of 166,053 sq km. The blocks on offer are lower than the earlier indicated number of 86. Moily said all types of hydrocarbon blocks would be available under the Nelp-X auctions.

The maximum number of nine blocks will be in Cambay followed by seven in Mumbai, five in Rajasthan and four in Gujarat (Saurashtra). The blocks will most likely be granted to companies on a revenue-sharing model, and not the existing production-sharing model. In the coming weeks, the ministry will come out with detailed bidding guidelines.

To make this round of exploration a success by incentivising the explorers, the government is also working on certain sops. For instance, the ministry is seeking a ten-year tax exemption for the ultra deepwater exploration. “The matter is under discussion with the department of revenue in the finance ministry. As of now, companies can avail a seven-year tax holiday in such cases,” an official said.

The government is also considering a tax policy suited for oil and gas exploration on the lines of the direct tax code (DTC).

Addressing the event, Prime Minister Manmohan Singh said supply of energy at affordable prices was key to economic growth and that the success of the hydrocarbon blocks offered through Nelp was crucial for India’s energy security. “We are encouraging domestic and global companies to explore potentially hydrocarbon-rich areas.”

Moily said the government was working to replace Nelp with a uniform licensing policy (ULP). The ministry had sought views of stakeholders on the issue. The proposed ULP is aimed at ensuring uniformity in contractual provisions for exploration and production of all kinds of hydrocarbons, and in a particular acreage, operators will be able to explore all types of hydrocarbon resources.

Moily said the ministry of environment and forests under him has also cleared stuck projects worth over Rs 1.5 lakh crore, including South Korean steel giant Posco’s $12-billion steel plant project in Odisha, after the steel plant was reportedly de-linked from the port project.

However, Vedanta’s Niyamgiri project, also in Odisha, did not get the green nod (read the report alongside). “We have rejected the project. It was turned down by gram sabhas,” Moily said.

Petroleum secretary Vivek Rae said the four-nation gas pipeline project envisaged for transporting gas from Turkmenistan to India and its western neighbours has made good progress. “We need to make that pipeline happen... That would be a game-changer.” The pipeline will open up the Commonwealth of Independent States and Asia-Pacific regions for sourcing gas for the energy-starved India, he said.

Come April, oil and gas exploration companies could get around $7-8 per million British thermal units (mBtu) for their gas produced domestically as per the new pricing guidelines, he said. “It could be $7-8 per mBtu probably, but I can’t really put a firm number on it... We will notify it around March 15 for the first quarter (April-June).” —with inputs from Cogencis

17 onland, 15 shallow-water and 14 deepwater blocks finalised

9 blocks will be in Cambay, 7 in Mumbai, 5 in Rajasthan and 4 in Gujarat

10-year tax exemption for ultra deepwater exploration likely

4-nation gas pipeline project from Turkmenistan to India making good progress


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