Veerappa Moily in New Delhi on Thursday. (PTI)
New Delhi, Sept. 26: The government will soon allow private players such as Reliance Industries and Cairn India to explore shale gas and oil in their existing blocks.
“The cabinet has approved shale gas exploration policy for national oil firms Oil India and ONGC. Soon, the same will be extended to other companies, including private players,” oil minister Veerappa Moily said at an industry event today.
Earlier this week, the cabinet had allowed ONGC and Oil India to explore shale gas and oil in onland blocks allotted to them on a nomination basis before the introduction of the New Exploration Licensing Policy (Nelp) in 1999.
“Initially, I was in favour of an integrated shale gas policy for all players, but there were some issues to be resolved. We decided to move ahead with ONGC and Oil India. At least one step forward is better than waiting,” Moily said.
The oil minister said the government would launch the tenth round of Nelp in January after the resolution of certain policy issues. “We have had nine rounds so far. Several issues came up in the Nelp rounds. We have learnt lessons. We are working on the next round. The tenth will be the perfect round,” he said.
Moily added that the Centre would soon resolve the differences over the interpretation of various contractual provisions. “I had a three-and-a-half-hour meeting with Reliance and BP last week. That shows we want to resolve the issues.”
RIL is protesting the government’s move to deny it the right over eight gas discoveries worth more than $8 billion following the expiry of the timeline to develop the area. It has also challenged the oil ministry’s proposal to deny it the benefit of any increased gas price from April 1.
Of the blocks likely to be offered in Nelp-10, 25 are deep water, 20 shallow water and 23 onland blocks. Nelp-10 is likely to be held on new terms wherein a bidder shall be asked to quote the amount of oil or gas it is willing to offer to the government from the first day of production.
Nelp-10 will be based on the suggestions of a panel headed by Prime Minister’s Economic Advisory Council chairman C. Rangarajan on production sharing contracts.
The company offering the highest share of output will get the block.