Shri Mani Shankar Aiyar, Minister of Petroleum & Natural Gas launched the Fifth round of New Exploration Licensing Policy (NELP-V) today at New Delhi. NELP-V provides an attractive investment opportunity for companies to explore oil and gas in 20 blocks, which comprise 6 deepwater blocks, 2 shallow water blocks and 12 onland blocks. The 20 blocks cover a sedimentary area of about 1,09,210 sq. km. The 12 onland blocks fall in the States of Andhra Pradesh, Arunachal Pradesh, Assam, Gujarat, Maharashtra, Rajasthan, Tamil Nadu and Uttar Pradesh. Maharashtra is being included for the first time for exploration under NELP.
The NELP-V round has been launched in the backdrop of huge oil and gas discoveries made by Reliance Industries Ltd. (RIL) and Niko Resources Ltd. in Krishna Godavari Deepwater (gas discoveries), by Cairn Energy in Barmer district of Rajasthan (oil discovery) and by RIL in North East Coast offshore. The RIL discoveries in Krishna Godavari deepwater are estimated to have over 14 Trillion Cubic Feet of In-place gas. Whereas, Cairn Energy has reported an In-place oil reserve of over 300 million barrels. The gas reserves of the country in the last 3 years have increased by about 50%.
Implementation of NELP has given impetus to exploration efforts in the country with increasing areas including deepwater coming under exploration. The exploration coverage with implementation of NELP has almost trebled. To consolidate the exploration efforts, the Government is now launching NELP-V.
Shri Aiyar highlighted the following new features of NELP-V as compared to the earlier rounds :
i) All geo-scientific data will be made available online through the internet to enable companies to view data at their own convenience and location.
ii) Work stations will be provided at Data Centres at London, Houston, Calgary and Dubai. The work stations will be equipped with software enabling companies to analyze and interpret the data at the data centre itself. Therefore, the software will enable companies to analyze data available on the blocks expeditiously. The objective of opening Data Centres is to facilitate companies to review and analyze data and provide on the spot clarifications.
iii) In order to provide marketing stability to the companies, the Government shall exercise its option to take its profit share of natural gas in cash or kind for a block of 5 years instead of such option being made every year as in the previous rounds.
iv) Data packages and information dockets will now be available at a discounted price as follows:
i) Block Data Package
| No. of data packages purchased | Proposed discount %age |
| 2 blocks | 10% |
| 3 – 5 blocks (both inclusive) | 20% |
| 6-9 blocks (both inclusive) | 30% |
| 10 blocks and above | 40% |
| No. of Basin Information Docket purchased | Discount Rate |
| 2 | 10% |
| 3 – 5 (both inclusive) | 20% |
| 6-9 (both inclusive) | 30% |
| 10 and above | 40% |
iv) In order to encourage small and medium size investors, companies having a net worth of US$ 500 Million or more will not be required to give a bank guarantee towards Minimum Work Programme commitment in respect of onland and shallow water blocks. This threshold value in the previous rounds was US$ 1000 Million.
v) In order to bring more transparency in the bidding process, weightages for all bid evaluation criteria including weightages for sub-criteria have now been made public under NELP-V for the first time.
vi) Details of all operational blocks from earlier rounds such as work programme, fiscal terms etc. will be available at Data Centres. This will enable companies to assess existing work programme as well as other bidding parametres while formulating their own bids and may also help them in forming strategic alliances.
A special web site on NELP-V containing much larger information as compared to earlier rounds has been prepared and is being hosted by Indigopool. Connectivity is also being provided through the website of the Ministry of Petroleum & Natural Gas and Directorate General of Hydrocarbons. Thus NELP-V details can be seen at the following web sites:
www.indigopool.com
www.petroleum.nic.in
www.dghindia.org
In order to mount an effective promotional campaign, the Government has engaged services of a Marketing Consultant namely the consortium of IndigoPool (a subsidiary of Schlumberger) and CWC Associates, UK. Road shows have been planned at New Delhi (18th January, 2005), London (20-21st January, 2005), Dubai (24-25th January, 2005), Houston (31st January – 1st February, 2005), Calgary (3-4th February, 2005) and Moscow (14th February, 2005). During this, presentations will be made on the emerging geological prospectivity of Indian basins as well as the contractual and fiscal framework. Successful operating companies in India and financial consultants will also share their experience of the working environment in the country. The road show will also cover one-on-one meeting with E&P companies / investors. The objective of the road show is to showcase India’s new discoveries and increase awareness about the policy framework as well as promote India as an attractive investment destination. These focussed efforts shall try to convince companies to visit data rooms and participate in the NELP-V bidding process.
In order to provide sufficient time to the interested companies to review and buy data, finalize strategic alliance etc., companies have been provided about 5 months and the bid closing date for NELP-V will be 31st May, 2005.
Along with NELP-V Road shows, ONGC will be offering farm-in opportunities in 5 deepwaters blocks – 3 in Krishna Godavari basin, 1 in Kerala Konkan offshore and 1 in Gujarat Kutch offshore on NELP terms. ONGC is seeking partners with requisite technical and financial capabilities.
ONGC is also offering 19 offshore fields, on service contract through international competitive bidding. The bid documents for this are already on sale.
| Details of Exploration Blocks on offer under NELP-V
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| Sl.No. | Block Name | Basin | Area (Sq. Km.) | State / Offshore | District | |
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| Deep Water Blocks |
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| 1 | KK-DWN-2003/1 | Kerala Konkan | 18245 | Western Off. |
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| 2 | KK-DWN-2003/2 | Kerala Konkan | 12285 | Western Off. |
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| 3 | KG-DWN-2003/1 | Krishna-Godavari | 3288 | Eastern Off. |
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| 4 | MN-DWN-2003/1 | Mahanadi | 17050 | Eastern Off. |
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| 5 | AN-DWN-2003/1 | Andaman Nicobar | 9970 | Andaman Off. |
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| 6 | AN-DWN-2003/2 | Andaman Nicobar | 13110 | Andaman Off. |
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| Shallow Offshore Blocks |
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| 7 | CB-OSN-2003/1 | Gulf of Cambay | 2394 | Western Off. |
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| 8 | GS-OSN-2003/1 | Saurashtra | 5970 | Western Off. |
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| Onland Blocks |
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| 9 | AA-ONN-2003/1 | Assam - Arakan | 81 | Assam | Golaghat | |
| 10 | AA-ONN-2003/2 | Assam - Arakan | 295 | Arunachal Pradesh | Changlang | |
| 11 | AA-ONN-2003/3 | Assam - Arakan | 275 | Assam | Tinsukia | |
| 12 | GV-ONN-2003/1 | Ganga Valley | 7210 | Uttar Pradesh | Deoria, Gorakhpur | |
| 13 | VN-ONN-2003/1 | Vindhyan | 3585 | Rajasthan | Kota & Jhalawar | |
| 14 | RJ-ONN-2003/1 | Rajasthan | 1335 | Rajasthan | Jaisalmer-Barmer | |
| 15 | RJ-ONN-2003/2 | Rajasthan | 13195 | Rajasthan | Jaisalmer-Barmer, Jodhpur | |
| 16 | CB-ONN-2003/1 Part-A & B | Cambay | 635 | Gujarat | Ahmedabad, Kheda | |
| 17 | CB-ONN-2003/2 | Cambay | 448 | Gujarat | Bharuch | |
| 18 | DS-ONN-2003/1 | Deccan Syneclise | | |||