Shri Murli Deora, Minister of Petroleum and Natural Gas has informed that under the ninth round of NELP, Government of India will be offering 34 blocks from 10 sedimentary basins. Speaking at the Curtain raiser for ninth round of offering exploration blocks under New Exploration Licencing Policy (NELP-IX) at London today he said that these include eight deepwater blocks, seven shallow water blocks, and nineteen onland blocks. The area of these 34 blocks is of the order of 88,807 sq. km, he adeded.
The curtain raiser was also attended by Mr. S. Sundareshan, Secretary (Petroleum and Natural Gas), Mr. Nalin Surie, High Commissioner of India in London, Mr. D.N.Narasimha Raju, Joint Secretary (Exploration), Mr. S.K.Srivastava, Director General, of Hydrocarbons, senior officials from the Government and prospective investors.
Following is the text of the Speech of Petroleum Minister
1. "I welcome you all to Today’s ‘Curtain Raiser’ prior to the launch of the Ninth bid round of the New Exploration Licensing policy."
2. The Government of India has been promoting investment in all segments of petroleum sector and has initiated various policy measures from time to time. In the upstream sector, the regular conduct of NELP bid rounds has resulted in securing investment of about 14 billion dollars. During last year, we held the 8th round of NELP for which a Road Show was held at this venue and in that round, a commitment of US $ 1.1 billion was obtained. The NELP policy has been able to attract significant level of foreign exchange in an area where significant amount of risk capital is to be invested.
3. In the downstream sector, our policies have promoted investment in the refinery sector in a major way. Today, export of value- added petroleum products has become the highest foreign exchange earner for our country. The refinery capacity is set to increase even further from the present 184 MMTPA to about 255 MMTPA during the XI Plan.
4. In the current year, the Government took a major policy decision in increasing the natural gas price produced from the blocks allocated to National Oil Companies on nomination basis and which was being sold at a low price under the Administered Price Mechanism. This measure has to a great extent, removed anomalies that existed in the price of gas.
5. The Government has made every effort to promote the growth of industry and at the same time, protect the interests of common man. In this regard, the Government decided recently to free the price of petrol from APM and to let the market determine the price. This will enable the oil marketing companies to realize market prices, improve their financial position and provide for their expansion plans. It has also been decided that the price of diesel be determined by the market in the near future. Presently, the subsidy burden on account of two sensitive petroleum products namely kerosene and domestic LPG are required to be provided to maintain the fuel supply line to the poorer sectors of the population. The LPG distribution network is so vast that it covers a huge customer base of 120 million served by about 9,500 distributors. Needless to say that such a large efficient network providing environment friendly fuel is operational because of the supportive policies of the Government.
6. Under the ninth round of NELP, Government of India will be offering 34 blocks from 10 sedimentary basins. These include eight deepwater blocks, seven shallow water blocks, and nineteen onland blocks. The area of these 34 blocks is of the order of 88,807 sq. km.
7. There have been major successes in the E&P industry in India. One is the production of oil from Barmer field in Rajasthan in which M/s Cairn Energy and ONGC are producing oil. This field which commenced production in the year 2008 is currently producing about 6 million tones of oil per annum which is expected to go up further and add to 25% of domestic oil production of 2008-09. Secondly, the block operated by Reliance Industries Ltd. in the Krishna-Godawari basin achieved a production level of about 60 mmscmd of gas, which has increased the domestic gas production by about 72% over that of 2008-09. These notable successes have established that the Indian basins are indeed rich in hydrocarbons.
8. India has had good trade relations with west European countries and trade with UK has been the largest in Europe. UK has been the third largest investor in India after Mauritius and USA. UK is the world’s 18th largest oil producer and ranks 8th in gas production. In India, more than two dozen international E&P companies are working which include some prominent British companies, namely, British Gas, British Petroleum, ENI, Cairn energy, Premier Oil, Hardy Exploration and Production. British Gas has a stake in Panna-mukta and Tapti Production sharing Contract, which has been producing oil and gas for 15 years now. British Gas is engaged in the city gas distribution through Mahanagar Gas ltd. in Mumbai, which is the commercial capital of India. I am happy to say that about half a million houses have now been provided with piped natural gas connections in Mumbai. BG India Energy Solutions Private Limited (BGIES), a wholly owned subsidiary of BG Group has commenced marketing operations in India to undertake wholesale marketing and distribution of natural gas. BP has also acquired one deepwater block in Krishna-Godawari basin under NELP VIII.
9. Under the exploration acreages under different rounds of NELP, 87 oil and gas discoveries have been made in 26 exploration blocks. Accretion of in-place hydrocarbon reserves of more than 640 Million Metric Tonne of oil equivalent has taken place.
10. Government has been responsive to the needs of the oil and gas industry. Recognizing the shortage of deepwater rigs, Government of India approved a drilling moratorium of three years starting from 1st January, 2008 to 31st December 2010 for deepwater block PSCs signed upto NELP-V which provided the operators the required time to complete the work programme.
11. The Natural Gas Industry is expanding into exploration and production of shale gas. This will be the new area for investment. Government of India has initiated action to develop and put in place a policy environment for exploitation of Shale Gas in Indian Basins. It is expected that in about a year’s time, blocks can be offered for shale gas.
12. Under NELP, licenses for exploration are being awarded through the international competitive bidding system and national Oil Companies (NOCs) are required to compete on an equal footing with Indian and foreign companies to secure petroleum Exploration Licences (PELs). I am happy to state that because of investor friendly policies of the Government, the response of foreign companies in the bidding rounds is on the rise. The companies have also found the operating conditions in India to be very smooth and hassle-free, which has added to the confidence of investors.
13. India is a democratic country and has well-established legal and financial systems with investor-friendly terms in the Production sharing Contracts (PSCs). The contracts signed between Government and E&P Companies under NELP have been honoured. The prices realized for crude oil sale are based on international price. 14. To conclude, investment in Indian E&P sector is one of the most lucrative opportunities today, on account of several factors, including the facility of single window clearances, readily available market for oil and gas, well established independent judiciary, stable democratic Government, a rapidly growing Economy, and a large resource base yet to be exploited. I invite the E&P companies from across the globe to take part in the NELP IX bidding process, which will be formally launched on 15th October in New Delhi, and to become partners in our efforts to enhance the energy security of the country. I wish you all the best in your efforts to take up exploration activities under NELP IX.