PULL FACTOR

New Delhi, Oct. 13: The government plans to offer 34 oil and gas blocks in the ninth round of the New Exploration Licensing Policy (Nelp).

The auction is expected to attract global players such as British Gas, Cairn Energy, BHP Billiton apart from domestic energy firms ONGC, Reliance Industries and Essar.

In the ninth round, the government will offer the 34 blocks from 10 sedimentary basins, including eight deepwater blocks, seven shallow water blocks, and 19 onland blocks. The area covered by the blocks is 88,807 sq km, officials said.

Nelp IX will be announced on October 15 and the first roadshow will be held in Mumbai on October 18. The last date for bidding is March 18.

In the eight rounds of Nelp since 1999, 235 blocks have been awarded. The area under exploration has increased 11 per cent to about 58 per cent of the country’s sedimentary basin between 2000 and 2010.

Oil ministry officials expect greater participation from foreign entities with global economy recovering and crude oil prices firming up.

Petroleum secretary S. Sundareshan said, “This time we have changed circumstances in the country on account of market determined prices of petroleum products and change in the gas prices under the administrative price mechanism. This provides comfort to investors wanting to invest in the country.”

The government also plans to make changes in the production sharing contract (PSC) to remove the ambiguity in tax incentives for oil and gas.

“The amendment will ensure that instead of profit-linked deductions on the taxable income that is now available to crude oil, investment-linked deductions will be applicable on the blocks that are licensed out under Nelp IX,” source said.