India's Ministry of Petroleum & Natural Gas has extended the New Exploration Licensing Policy (NELP) VIII and Coal Bed Methane (CBM) IV bid closing date to October 12, 2009. This follows the announcement of tax concessions by the finance minister Pranab Mukherjee in budget 2009-10. In the NELP-VIII licensing round, a total of 70 oil and gas blocks have been offered while 10 areas are offered in the CBM-IV round.

In the budget proposals for 2009-10, the finance minister extended a seven-year holiday from payment of income-tax on profits earned from production and sale of natural gas for blocks under NELP-VIII under section 80-IB(9) of the Income Tax Act. The section was previously applicable only to profits from commercial production or refining mineral oil.

In another development, the Indian government reportedly intends to frame new rules for the pricing and marketing of oil and gas exploration blocks under NELP-VIII. The new rule will allow the government to have equal right along with the winning bidders to set the sales price of the gas. The government will also have a right in deciding the buyers and the quantities.

In the NELP-VIII round, first announced in April 2009, a total area of 170,000 square kilometers has been offered for private participation. It includes 24 deep water blocks, 28 blocks in shallow water, 8 onshore blocks and 10 blocks classed as Type-S. Eight Type-S blocks are in the Cambay Basin while two are in Assam. The last date for submitting bids, previously set for August 10, 2009, has since been extended.

Under the CBM-IV round, 10 blocks in various coalfields covering an area of 5,000 Sq. Km have been put up to international bids. These blocks are located in the seven states of Assam, Jharkhand, Orrissa, Madhya Pradesh, Chhattisgarh, Maharashtra and Tamil Nadu.

The first promotional road show for NELP-VIII and CBM-IV rounds are scheduled in Mumbai on August 8, according to the website of Directorate General of Hydrocarbons (DGH). This will follow road shows in Houston (August 20-21), Calgary (August 24-25), London (September 8-9), Perth (September 22) and Brisbane (September 24-25, 2009).

Since the start of NELP in 1997, the government has awarded 206 blocks in the first seven rounds. Of these, 68 oil and gas discoveries have been made in 19 blocks, setting up reserves of 500 million tonnes of oil and oil-equivalent gas.

In the previous three CBM rounds, India has awarded a total of 23 CBM blocks. In addition, two blocks were awarded on a nomination basis and one through Foreign Investment Promotion Board (FIPB) route prior to these rounds.