As 86 blocks, including 54 recently cleared by the Forest Survey Institute, go under the hammer, they become the largest number of blocks to be auctioned in a single financial year after 1998. These blocks, likely to be put on auction this month, are likely to garner investment worth $15 billion. Rahul Kamat presents reports on the basis of his interaction with M Veerappa Moily, Union Minister for Petroleum and Natural Gas.
After two years of waiting, the government´s New Exploration Licensing Policy (NELP) Round X is likely to take place this month. Since the government was scrutinising short-term concerns brought by the investors in a recent meeting held in Mumbai, Union Minister Veerappa Moily has emphasised that the next round of NELP will be done under the new terms of engagements, based on recommendations by the Rangarajan Committee.
At a meeting held in November between the Ministry of Petroleum and Natural Gas and private investors, the private investors raised some concerns over clarity in product sharing administration, and delays in grant of clearance and government´s policy on integrated discoveries. Reliance has decided not to participate..
As per the terms under finalisation, the bidders may have to quote the quantity of oil or gas that would be shared with the government from the first day of production. In case of identifying NELP blocks, the government have decided to put 86 hydrocarbon blocks for bidding in the Round X by 15 January to attract more investments into the exploration and production (E&L) sector..
Now, since Moily has taken additional charge of the environment and forests ministry, it is expected that as many 54 of 86 hydrocarbon blocks will be cleared. The blocks only need environmental clearance as it has already received a nod from the Forest Survey Institute. .
Since 2010-12 (NELP VIII and IX) the government have auctioned 46 blocks and the year 2012-13 and first of the same period saw no blocks cleared for exploration purposes. These blocks, once auctioned, would translate into investments worth $15 billion within 5-6 years. .
But this will be subject to major discoveries. According to the ministry, the NELP X would be the second highest offering of blocks since its inception in 1999. Of the blocks being considered for offering in NELP-X, 25 are deep-water, 20 shallow-water and 23 onland blocks. The government has, in the previous nine rounds, awarded 254 blocks for exploration of oil and gas.
In addition, with additional charge in hand, it is expected that Moily can give the green signal to some of the major infrastructure projects like Mahan coal block, NHPC´s 800 MW Tawang Hydroelectric Project, Rs 50,000 crore steel project of Posco in Odisha. On gas pricing: According to Moily, the ministry will not succumb to any pressure from other ministry on the uniform gas pricing policy. The minister has made it clear that gas policy will remain uniform to every sector including fertiliser or power. As far as subsidy is concerned, it is the prerogative of the finance, fertiliser and power ministries. On green gas corridor: Gas Authority of India (GAIL) has already identified the locations for green gas corridor project. The proposed corridor will pass through, and benefit eight states: Delhi, Haryana, Karnataka, Maharashtra, Madhya Pradesh, Punjab, Uttar Pradesh and Rajasthan.
In this exercise, the government undertaking will add another 16,000 km of gas pipeline network to the already 13,000 km long gas pipeline infrastructure at present, making it 29,000 km all together. The proposed corridor aims to establish the natural gas highway in the country. The refuelling facilities across the green highway will boost up long haul transporters in adopting natural gas as more and more gas stations will come up. The gas pipeline from Bangalore (Karnataka) to Jalandhar (Punjab) will encourage transforming inland transportation to operate on natural gas vehicles.