BP, British Gas, Shell likely to bid for Nelp-IX

The Ministry of Petroleum and Natural Gas (MoPNG) is expecting companies such as British Petroleum, British Gas and Shell, among others, to participate in the ninth round of New Exploration Licensing Policy (Nelp) starting October 15.

“Our curtain raiser for Nelp-IX was very successful. Around 48 foreign companies participated and showed interest in our blocks,” said S Sundareshan, oil secretary.

The Ministry of Petroleum organised the curtain raiser for Nelp in London last week.

“This time we have changed circumstances in the country on account of market determined prices of petroleum products and change in the APM gas prices. This provides comfort to investors to invest in the exploration sector of the country,” added Sundereshan.

This time the government is likely to offer around 34 blocks for oil and gas of which 19 would be onshore while 15 would be offshore.

In 2009, the government had offered 70 oil and gas and 10 Coal Bed Methane (CBM) blocks in the eight round of Nelp. The government had received bids for only 36 oil and gas blocks and 8 CBM blocks.

State-run Oil and Natural Gas Corporation Limited was a front-runner in bidding for oil and gas blocks last time, while Mukesh Ambani-controlled Reliance Industries (RIL) did not bid for any oil and gas block.

In 2009, the world economy was recovering from the meltdown. Most companies were finding it difficult to raise money from the market and oil majors such as ExxonMobil, Shell, BP and among others had not participated in the eight round of Nelp.

The government has so far signed 203 production sharing contracts in the first eight rounds of Nelp.

While in the previous rounds of Nelp the government had offered a seven-year tax holiday for the companies who start production, the Ministry of Finance has refused to offer any such benefits this time around. Experts have expressed their apprehensions over interest of the companies to invest in India without having the cushion of tax benefits, but the increase in the prices of APM gas and decontrol of petroleum products may act as a game changer.