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Lloyds List: Sixth round of NELP attracts serious interest from nearly 70 companies

Lloyds List; Apr 11, 2006

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THE sixth round of India's New Exploration and Licensing Policy for oil and gas exploration has attracted considerable interest from both domestic and foreign companies, writes Shirish Nadkarni, Mumbai .

According to Indian Petroleum Secretary MS Srinivasan, over $4.5bn of investment has already been committed by the private sector under the auspices of NELP-VI.

The government had formulated the NELP system in 1997-98 with the aim of providing a level playing field for bidders and transparency in the award of exploration acreage.

As many as 55 blocks 24 in deepwater, six in shallow water and 25 onshore blocks have been put up for bidding in the sixth licensing round.

The government is expected to finalise the award of blocks by November 15, and production-sharing agreements (PSAs) should be signed by January 15, 2007.

Indian Petroleum Minister Murli Deora said: 'After five rounds, the area under exploration has increased more than three times and reserve accretion has already been around 600m tonnes with $5bn of investment commitment received.'

Close to 70 companies have so far demonstrated interest in NELP-VI. These include foreign companies such as Eni of Italy, and London-listed BG Group.

Russian gas monopoly Gazprom, oil super-major Shell, Itochu of Japan, Niko of Canada and London-based Premier Oil have also shown interest.

Indian companies that have put their names forward include major national oil companies such as Oil ' Natural Gas Corp and Indian Oil Corp.

Other Indian public sector undertakings, including National Thermal Power Corporation and Gujarat State Power Corp, and private companies such as Reliance, Jubilant Enpro, Tata Petrodyne, Hindustan Oil Exploration Co and Assam Co, have also shown interest.

In order to promote the transparent growth of the petroleum sector, Mr Deora said that efforts were being made to establish a Petroleum and Natural Gas Regulatory Board.

India needs to scale up hydrocarbon exploration given that it consumes about 3% of global oil and gas, yet still relies on costly imports to meet a significant amount of its energy needs.

Over 81% of the total potential within the country is still to be explored. Since 2000, an average of four oil and gas discoveries per year have been reported. But last year, 15 finds were reported, which goes some way to explaining the high level of interest in the current bid round.

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