Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

Fast-track push for 20 offshore exploration blocks

Jan 22 2013, 03:30 IST
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SummaryThe petroleum ministry is set to approach the Prime Minister-led Cabinet Committee on Investment for fast-tracking the approvals for 20 offshore exploration blocks, held up for want of defence ministry clearances, despite the firms having signed production-sharing contracts.

n Petroleum ministry knocks on investment body’s door for clearances

Move would benefit RIL, Cairn, BP, BHP Billiton and ONGC

The petroleum ministry is set to approach the Prime Minister-led Cabinet Committee on Investment (CCI) for fast-tracking the approvals for 20 offshore exploration blocks, held up for want of defence ministry clearances, despite the firms having signed production-sharing contracts.

The move would benefit Reliance Industries, Cairn, BP and BHP Billiton, apart from public-sector ONGC.

In the oil sector, government awarded several exploration blocks to firms under the New Exploration Licensing Policy (NELP) rounds.

But still there are 52 blocks waiting to get relevant approvals from the defence and environment ministries.

This has created an uncertain environment in the sector as exploration is by nature a high-risk business.

Out of the 52 blocks awaiting clearances, 22 are operated by ONGC, 15 by Reliance Industries, five by BHP Billiton, three by Cairn Energy, two by Santos and one each by BG Group, BP and ENI.

The Indian and foreign companies have already invested $12.4 billion for exploration and development activities in these blocks, according to official data. “We have raised our concerns to the PMO. It is taking interest in getting clearances,” an official of Cairn Eneregy said.

He added that Directorate General for Hydrocarbons, the technical arm of the oil ministry, has already given its clearances for its blocks which were under review.

Under nine auction rounds, India has awarded 249 blocks. But so far, discoveries have been made in only 36 blocks.

It is holding back clearances for more than a fifth of the exploratory blocks that has been auctioned in various rounds since 1999 to domestic and overseas energy explorers.

The delay is hurting the nation's plans to expedite exploration of its oil and gas assets and ramp up local output to cut its import bill and may threaten investments by overseas explorers in the country's energy sector. Though the British major earlier claimed to continue to hold interest in the country's hydrocarbon business, it seems the delays in government approvals and unstable policies have forced foreign majors to change their perspective. Earlier, companies like Petrobas of Brazil and London-based BG Group exited India.

The Prime Minister Manmohan Singh-led CCI has been set up to oversee delays in approvals for large infrastructure projects in sectors such as energy, railways, roads and highways, airports.

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