Bidding For NELP VII Set To Kick Off On Nov 5

NEW DELHI: The government is all set to announce the seventh bidding round for exploring about 75-85 oil and gas blocks under the New Exploration Licensing Policy (NELP). The announcement, expected on November 5, would incorporate several changes in terms and conditions to avoid confusions that occurred while implementing production sharing contract (PSC) with RIL for its KG basin gas find.

Sources said the price discovery process on arm’s-length basis would be adopted in the future Nelp contracts only after the approval of the price formula or basis by the government. The price formula (or basis) for future NELP would be structured in such a way that there would be a long range variation in the biddable component.

It is understood that PSC for NELP-VII would include several other recommendations of the empowered group of ministers (EGoM) constituted to resolve gas pricing and allocation issues with reference to RIL’s natural gas find in the D-6 block of the KG basin. “Decisions taken by EGoM are being incorporated for the seventh bidding round under Nelp, which is proposed to be launched later this year,” the petroleum ministry communicated to the Cabinet secretariat.

When contacted, Directorate General of Hydrocarbon DG VK Sibal said: “November 5 has tentatively been fixed for announcing NELP-VII.” He did not comment on the exact number of blocks to be offered in the round as the process of fixing the number was still on.

Sources said the identified blocks for NELP-VII are located in the Rajasthan basin, Cambay basin, Himalayan Foreland and Punjab basin, Ganga basin, Kutch basin, Saurasthra basin, Vindhyan basin, Mumbai Offshore basin, Kerala-Konkan basin, Purnea basin, Bengal basin. Mahanadi basin, Krishna-Godavari basin, South Rewa basin, Palar basin, Assam-Arakan basin, Deccan Syneclise, Cuddapah basin and Andaman basin.

It is likely that some identified blocks would be dropped in this round due to security concerns or other considerations. It is understood that concerns have been raised by the home ministry over some of the prospective areas in Gujarat, Rajasthan, Punjab, Madhya Pradash and Jharkhand.