In all, the ministry has offered 25 oil blocks in the second round, including eight each in shallow and deep water and nine on land.

Essar group officials said that they would submit their bids for undertaking exploration, the last date for which is March 31, this year. Sources informed that the seismic data is under study and the bids would be submitted after the study is completed. The company claimed that it is eligible for submitting the bids.

The "not-so-encouraging" response to the first round of bidding prompted the government to introduce some modifications to the bidding process in the second round, after consultations with companies who took part in the first round of bidding. In the first round, only 27 of the 48 blocks offered were picked up by the oil companies.

Nelp will allow 100 per cent foreign participation and additional incentives have been offered for those bidding for deep water blocks. Royalty on the oil produced for the onshore blocks is 12.5 per cent, while for offshore will be 10 per cent. Deep water blocks will pay only 5 per cent royalty.

The companies making a bid will not be required to pay any signature bonus, import duties or any other upfront payments. The public sector oil companies have been allowed to compete on par with the private sector for the blocks.

In addition to this, the government has also introduced a petroleum tax guide for potential bidders, which is single point compilation of the tax provisions for exploration and production. The companies have been given set-offs and deductions on exploration and drilling expenditures.