Petroleum Ministry moves PMO to clear hurdles to oil and gas blocks

Out of 194 blocks under operation, 79 blocks were having clearance issues

The Petroleum and Natural Gas Ministry has warned the Prime Minister’s Office (PMO) that unless proactive efforts are made to fasten the process of pending clearances for oil and gas blocks, the country could witness an ‘exodus’ of foreign companies and billions of dollars of investments.

Foreign oil and gas giants were lured to India with a promise of conducive investment environment, it said. Non-clearance would adversely effect investment environment for the future. “Non-clearance at later stages, as has happened in many cases, could lead to litigation and claims for damages,’’ the Petroleum Ministry told PMO in a presentation on July 2.

The Principal Secretary to the Prime Minister, Pulok Chatterjee, was present at he meeting where concerns were expressed over the failure of the Defence Ministry and its wings to grant clearances to various oil and gas blocks auctioned under New Exploration Licensing policy (NELP) rounds. Officials of the Petroleum and Defence Ministries were also present during the meeting. In the nine rounds of NELP policy, 249 oil and gas blocks have been awarded by the Government through international competitive bidding.

Resenting that obstacles were being created in the path of exploration and production from various oil and gas blocks, the Petroleum Ministry told the meeting that out of the 194 blocks under operation, 79 blocks were having clearance issues. Out of this, 74 blocks have been taken up with the Ministry of Defence.

After a series of meetings, 28 blocks have been cleared by the Ministry of Defence while 46 blocks are still awaiting clearances. “Nearly $12 billion has been invested in nearly 49 blocks that are hanging fire for years. We fear that this could witness a withdrawal of investments if proactive steps are not taken to sort out the mess,’’ the Petroleum Ministry officials are understood to have told the meeting.

Out of the blocks pending clearances with the Ministry of Defence, seven each are pending with DRDO and Indian Air Force, 17 with Navy, three with DRDO and IAF, one with Navy and IAF and four with DRDO, Navy and IAF.

These blocks are spread over KG basin, Mumbai Basin, Gujarat-Saurashtra, Mahanadi basin, Andaman Basin and Cauvery Basin.