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Of the 45 blocks that received bids in the seventh round of auction under New Exploration Licensing Policy, the Cabinet Committee on Economic Affairs (CCEA) did not award a deepwater block in Mumbai basin to Cairn Energy India as it found the low bid by the sole bidder "detrimental to the government's interest in future in terms of profit petroleum." Minister of State in Prime Minister's Office Prithviraj Chauhan, briefing reporters on CCEA decision, said the production sharing contracts (PSCs) for the 44 block would be signed in a month.
A total of 57 blocks were offered in the auction but bids were received only for 45, with about USD 1.49 billion minimum investment committed in exploration spend, Petroleum Secretary R S Pandey said.
ONGC and partners bagged the maximum number of 20 oil and gas exploration blocks offered by India in its largest ever international bid round that closed on June 30. First timers BHP Billiton and GVK Power emerged winners in seven deepsea blocks.
Reliance Industries forged an alliance with British Petroleum Plc but could manage only one Krishna-Godavari basin block.
Pandey said the government was considering bringing a next edition of bid round, NELP-VIII in February 2009. "Blocks are under finalisation and we hope to come out with NELP-VIII in February."
Of the 57 areas offered in NELP-VII, seven deepsea, two shallow water and three onland blocks did not receive any bid. The Phase I investment commitment includes USD 321.15 million for exploration in deepsea, USD 598.255 million for exploration in shallow waters and USD 572.75 million has been committed for onland blocks, officials said.
Besides seismic surveys, 141 exploration wells have been committed in the mandatory Phase I by the winning firms.
The CCEA, in awarding the blocks, went by the suggestions made by a Committee of Secretaries that recommended for award seven out of the 12 deep water blocks to the consortium of BHP Billiton and GVK Oil and Gas. Two blocks went to ONGC-GSPC consortia, while one block each went to Reliance Industries- British Petroleum JV and ONGC-Oil India consortia.
Of the shallow water blocks, the consortia of ONGC, GSPC and HPCL-Mittal Energy bagged two Krishna Godavari basin blocks. ONGC-GSPC, Adani Welspun and Essar- Nobel were recommended winners for one shallow water offshore block each.
ONGC and its partners were recommended for 11 onland blocks, while the consortia of OIL, HOEC and HPCL- Mittal Energy were recommended for a Rajasthan block.
Indian Oil Corp, Omkar Natural Resources, Vasundhara Resources, EnSearch Petroleum, GAIL and Quest Petroleum were other recommended winners for onland blocks.
The award was due on September 30 but was delayed.
Chauhan said the CCEA authorised Petroleum Ministry to incorporate suitable provisions with legal vetting by Department of Legal Affairs in the award letter as well as in the PSCs for all nine small onland blocks and five Mumbai basin deepwater blocks.
"It is expected that the award of the blocks under NELP- VII will result in more discoveries, further investments in development of oil fields leading to higher reserves accretion and eventually, production of oil and gas," he said.
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