CCEA awards 44 oil & gas blocks worth $1.5-billion investment

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New Delhi, Nov 20 : In a bid to reduce dependence on imported petroleum products and gas, the government on Thursday gave its nod to award 44 oil and gas exploration blocks with total investment commitment worth $1.5 billion under the seventh round of the New Exploration and Licensing Policy. ONGC and its different bidding partners for various blocks bagged the maximum number of exploration blocks(20), while BHP Billiton-GVK Power partnership managed the second highest (7) number of blocks.

Of the 45 blocks for which bids were received out of the 57 blocks being offered in this round of auctions, the Cabinet Committee on Economic Affairs (CCEA) decided not to award a deepwater block in Mumbai basin to Cairn Energy India. Cairn was the sole bidder for the block and its bid was considered too low and ‘detrimental to the government’s interest in future in terms of profit petroleum’ by the Centre.

Petroleum secretary RS Pandey said that the government is working towards inviting bids for the next round of auction — NELP-VIII — by February 2009. “The blocks are being finalised and we hope to come out with NELP-VIII in February,” he said.

The production sharing contracts (PSCs) for the 44 blocks currently in question would be signed in a month’s time, said Prithviraj Chauhan, minister of state in the Prime Minister’s Office. “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.

Of the 57 oil blocks offered in NELP-VII, seven deep-sea, two shallow-water and three on-land blocks did not evince the interest of a single bidder. The NELP Phase I total investment commitment includes $321.15 million for exploration in deep sea, $ 598.255 million for exploration in shallow waters and $572.75 million for onland blocks.

In awarding the blocks, the CCEA followed the recommendations of an empowered committee of secretaries (ECS). Of the deep sea blocks, two were awarded 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 emerged as the preferred bidder of two Krishna Godavari basin blocks. ONGC-GSPC, Adani-Welspun and Essar-Nobel were announced winners for one shallow-water offshore block, each.