NELP-VIII draws $1.34 bn investment: Govt

Rubbishing comments that India's largest auction of oil and gas blocks flopped last week, the government said on Wednesday the eighth round of NELP attracted over $1.34 billion in minimum investment, a shade better than previous edition.

The eighth round of New Exploration Licensing Policy ended on October 12 attracting bids for 36 out of the 70 areas that had been offered.

"In NELP-VIII, we got investment commitments of $1.346 billion. Compare this with $1.7 billion investment committed in the 44 blocks that went out in NELP-VII, I think we have done better," oil secretary R S Pandey said.

The round, he said, fared better than licensing rounds elsewhere in the world where even hydrocarbon rich nations like Brazil and Algeria attracted bids for less than half of the blocks on offer.

"Some say NELP-VIII has flopped but none have actually compared how we fared vis-a-vis similar licensing rounds the world over," he said.

"Globally, the economic meltdown and credit crunch has forced companies to cut new investments."

Energy giants like Exxon and Chevron have not bid for exploration areas anywhere in the world and so their absence from Indian round should not be a surprise.

"They say the level of participation was less. But lets do a comparison. In NELP-VII last year, 19 blocks on offer received single bids. In the current round, 21 areas got single bids," Pandey said.

On the criticism that state-run Oil and Natural Gas Corporation walked away with majority of the blocks, Pandey said ONGC had been the most aggressive bidder since the inception of NELP rounds in 1999.

"This (India) is its turf. It has to protect it and so it is natural that it will bid aggressively," he said.

Pandey described the response to NELP-VIII as 'good' saying globally the economic slowdown and credit crunch has seen poorer response. Hydrocarbon rich nations like Brazil could manage bids for only 54 out of the 130 blocks offered while Algeria awarded only four out of 15 areas offered.

On allegations that his ministry's interference in marketing of gas was responsible for the poor response, he said: "Since NELP-I, the kind of marketing freedom or the lack of it has been broadly the same."

"We have done better than many," Pandey said, adding that Uruguay this year got bids for just two of the 11 blocks offered, Indonesia got bids for five out of 16 blocks offered,

Iceland could not award a single block while Norway managed bids for 35 out of 67 areas offered.

India's NELP was perhaps the most transparent licensing regime in the world where the outcome is known within minutes of submission of bids.

"It's very transparent. You submit your bid, see who else has done and then watch for yourself the bids being opened and evaluations done. All within minutes," he said adding the entire process of awarding and signing of agreements for the NELP-VIII blocks would be completed in three months.