Government says the ongoing dispute and litigation between Ambani brothers will have no impact on the bidding.
The government on Saturday launched the largest auction of oil and gas blocks and said the ongoing dispute and litigation between Ambani brothers will have no impact on the bidding.
"There will be no effect because of this. You see the presence here (at the road show). This is self explanatory. I don't see any adverse effect on the bidding rounds," Petroleum Secretary R S Pandey told reporters at the first road show for NELP-VIII in New Delhi.
India had on April 9 launched the eighth round of auction of blocks for exploration under NELP with August 10 being the last date for bidding. But it was deferred within a week over ambiguity on tax holidays for natural gas.
All the major oil and gas companies operating in India as well as foreign firms, including BG Group of UK and Cairn Energy, participated in the jam-packed road show.
Pandey denied reports that the government was diluting the policy for gas price fixation and marketing proposed in NELP since its advent in 1999.
NELP provides for the government's approving the pricing formula for the gas produced from the areas auctioned in the NELP rounds and the fuel being sold in accordance with the government's gas utilisation policy.
"There is no change in policy. We are proposing no modification... Don't believe in misinformation being spread," Pandey said, adding, that the fundamentals of NELP in the latest offering remain same as in the first seven rounds.
"Only bidding criteria has been tweaked, but there is no fundamental change in the policy," he said.
Pandey and Petroleum Minister Murli Deora who kicked-off the road-show here declined comments on the dispute between the Ambani brothers.
India today relaunched its largest ever auction of oil and gas exploration areas, aiming to attract an investment of $3-4 billion towards boosting energy security.
Petroleum Minister Murli Deora kick-started the offer of 70 oil and gas exploration areas in the 8th edition of the New Exploration Licensing Policy (NELP) and 10 coal bed methane (CBM) blocks with the first roadshow.
"NELP can be portrayed as India's success story in our endeavour to achieve self-sufficiency in hydrocarbons," he said at the promotional roadshow.
Under NELP, 71 oil and gas discoveries have already been made in 21 exploration blocks by accretion of in-place hydrocarbon reserves of more than 600 million tonnes of oil equivalent, he said.
"Major natural gas production in KG basin commenced from April. With this, gas production in the country would be doubled, and in monetary terms it would be about $42 billion."
Total committed investment in NELP rounds for exploration so far is around $10 billion, out of which $5.3 billion has been invested in exploration. Further, $6.6 billion will be invested towards development of the Exploration and Production sector.
Deora said the last date of bidding for the nation's largest ever auction of oil and gas blocks is October 12.
A revised timetable has been drawn after Finance Minister Pranab Mukherjee extended the 7-year income-tax holiday to natural gas production.
India had on April 9 launched the eighth round of auction of blocks for exploration under NELP with August 10 being the last date for bidding. But it was deferred over ambiguity on the availability of tax holidays for natural gas.
After Mumbai, roadshows will be held in Houston (August 20-21), Calgary (August 24-25), London (September 8-9), Perth (September 22) and Brisbane (September 24-25).
Data centres have been set up at oil regulator DGH's office in Noida, on the outskirts of the national capital, London, Calgary, Houston and Perth, he said.
The round is being relaunched after Mukherjee in his Budget speech for 2009-10 said, 7-year holiday from payment of income tax on profits earned from production and sale of natural gas would be available for blocks to be awarded in NELP-VIII.
India is offering 24 deep-sea blocks, 28 shallow water blocks and 18 onland blocks for bidding in NELP-VIII hoping to attract $3 billion investment in exploration.
The 75 per cent energy-import-dependent nation has also offered for bidding 10 areas for extraction of gas from below the coal fields or CBM.
The government had launched NELP-VIII and CBM-IV on April 9 and bids were to close on August 10.
Fearing investor backlash on ambiguity over tax holiday for natural gas, the government had on April 17 deferred the promotional roadshows.
The finance ministry had in 2008-09 Budget scrapped the 7-year tax holiday or exemption from payment of income-tax on natural gas production.
Though oil and gas naturally occurred together and a single well could be producing both, the incentive was restricted only for crude oil production.
The move drew flak from oil majors who kept away from the previous NELP-VII round that closed after the announcement.
Asia's third-largest energy consumer is aiming to cut oil imports and has till now awarded 203 blocks in the previous seven rounds with over $11 billion committed as exploration spend.
Besides, 23 blocks have been awarded in the last three CBM rounds. More than six trillion cubic feet reserves have already been established in four CBM blocks.
Since its advent in 1999, NELP has made 68 oil and gas discoveries in Cambay onland, North East Coast and Krishna-Godavari deep-water areas totaling over 600 million tonnes of reserves.
Worldwide spending on oil and gas exploration may drop 12 per cent in 2009 to $400 billion, Barclays Capital Research has stated.
India had offered 57 blocks in NELP-7 last year and awarded 44 to companies like BHP Billiton and Oil and Natural Gas Corp (ONGC). In the first six rounds, 162 areas with an investment commitment of $8.33 billion were awarded.
Of the total committed investment of $8.33 billion received in the first six rounds of NELP, $3.887 billion was spent by oil and gas companies till March 2007.
Of the $8.33 billion promised investment, the largest commitment of $3.32 billion was received in NELP-6, where 52 out of 55 blocks on offer were grabbed.
Image: Reliance Industries KG-D6's floating production storage and offloading vessel off the Bay of Bengal.
Photograph: Reliance Industries/Handout/Reuters
