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Updated: November 14, 2013 16:37 IST

Petroleum ministry keen to get nod in advance for NELP round X

Sujay Mehdudia
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A file picture of Mr. V.K. Sibal, Director General of Hydrocarbons takes out the bid documents duirng NELP VI in New Delhi. Photo: Ramesh Sharma.
Business Line
A file picture of Mr. V.K. Sibal, Director General of Hydrocarbons takes out the bid documents duirng NELP VI in New Delhi. Photo: Ramesh Sharma.

Learning from its past experiences, the Petroleum and Natural Gas Ministry is keen to get all the clearances including defence and environment before hand for the nearly 68 oil and gas blocks that are proposed to be put on offer during the New Exploration Licensing Policy (NELP) Xth round early next year.

The decision to seek prior major clearances for the oil and gas blocks was felt as in the past a large number of oil and gas assets got stuck for years for want of proper clearances. Almost 78 onshore and offshore blocks were held up in the recent years as clearances from the Defence Ministry were either revoked or did not come through leading to virtual halt of exploration and production activity across the country.

The Petroleum Ministry has set up an in house expert committee to look into this major issue and work along with the various Ministries particularly the Defence Ministry and the Ministry of Forest and Environment to seek clearances for the blocks that would be put on offer in the next round of auctioning. “This expert committee comprises of people from various background including army, navy, forest and environment and would work jointly to remove hurdles in the path of smooth clearances. There has been pressure on the government to fast track clearances in order to attract global players for next round of auctions,’’ a senior Petroleum Ministry official said.

The effort of the committee would be to get advance clearances and seek to avoid offering blocks where major security issues are involved. The development comes close on the heels of the recent exit of global giant BJP Billiton from nine of its 10 oil and gas blocks due to failure to secure defence clearances even after a long wait. “We do not want to send a wrong message to international investors and want them to take part in future investment in hydrocarbon sector of the country,’’ the official remarked. BHP Billiton was offered the oil and gas blocks during the 8th round of bidding.

The tenth round of NELP would be the second highest offering of blocks since the advent of New Exploration Licensing Policy (NELP) in 1999. Of the blocks being considered for offering in NELP-X, 25 are deep water, 20 shallow water and 23 on land blocks.

Similarly, the Petroleum Ministry has also advised all the players in the oil and gas business not to approach directly the Defence Ministry for clearances and go through the nodal Ministry instead. This follows a recent missive by the Defence Ministry to the Power and Petroleum Ministries asking it to issue necessary directions to the investors and companies not to file direct applications with the Defence Department for seeking clearances on security related matters.

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