The second roadshow of the eighth bid round of New Exploration Licensing Policy (NELP-VIII) and fourth bid round of coal bed methane (CBM-IV) was held at Houston on August 20, 2009. This roadshow was a part of promotional road shows organized by Government of India at various places, first one having been held at Mumbai on August 8, 2009 inviting exploration and production companies and investors to avail the highly attractive investment opportunities being offered under NELP-VIII.
The roadshow was held to promote 70 exploration blocks under NELP and 10 blocks under CBM offered for global competitive bidding.
Minister of State (P&NG) Jitin Prasada emphasised that there are well established administrative, regulatory and legal systems which provide for ease of operations in India. The policy environment is attractive and an investor friendly production sharing contract (PSC) regime exists. The government of India has assured seven years tax holiday to commercial production of both oil and gas from blocks under NELP-VIII and CBM-IV bid rounds.
Prasada informed that the main objective of organising the roundtable was to make the US exploration and production companies aware about the investment opportunities in India in this sector within the given framework of the NELP & CBM policies focussing on attractive fiscal incentives offered under the said policies. The roundtable was attended by about 20 companies including Cheveron Corporation, BG Group plc, BHP-Billiton, BP Plc, Exxon Mobil Corporation, Hess Corporation under the aegis of US Department of Energy and US India Business Council.
Jitin Prasada stated that the recent huge discoveries have significantly changed perceptions about the geological prospectivity of India’s Sedimentary basins. Government of India would utilise this in undertaking an effective promotional programme to highlight the attractive investment opportunities available under NELP-VIII and CBM-IV to prospective investors which would make global investors aware of the opportunities that exist under NELP and CBM as well as information on the exciting new development in E&P sector. Presently area under exploration is about 50% of Indian Sedimentary Basins. During XI plan period, area under exploration has been targeted at 80% of total Indian Sedimentary basins.
Jitin Prasada mentioned that the rapid strides made in economic development coupled with high GDP growth rates in last couple of years have led to a very vibrant Oil & Gas Sector in India. More than two dozen international oil companies (IOC) are presently working in India including BG Group plc, BP Plc, Royal Dutch Shell Plc, ENI S.p.A, Gaz de France, BHP Billiton, Santos, OAO Gazprom, Naftogaz of Ukraine NJSC, Cairn Energy Plc, Niko Resources Ltd., Hardy Exploration & Production, to name a few. Since the NELP regime was adopted in India 10 years ago, about two dozen E&P operators have been awarded exploration blocks of which 50% are overseas companies. This level of participation by global companies in Indian E & P sector has been increasing and is an encouraging trend.
A total of 27 E&P companies/Organisations including the leading E&P companies and 25 non E&P companies including service providers participated in the successfully held road show at Houston . Some of the main E&P companies which participated in the Roadshow were ConocoPhilips, Noble Energy, Inc, Exxon Mobil Corporation, Petrotel, BHP Billiton, Devon Energy Corporation, Hess Corporation, BP Plc, BG Group Plc, Apache Corporation, Total S.A, Reliance Industries Limited and Oil & Natural Gas Corporation Limited. Thomas Cutler from US Department of Energy and Paul Kleijnen Head of Exxonmobil India highlighted the expectation of US companies for making investment decision in India. The concerns of US companies were clarified by the Indian Delegation.
In his presentation to investors, D.N. Narasimha Raju, Joint Secretary (Exploration) Ministry of Petroleum and Natural Gas, Government of India stated that NELP-VIII is being offered in the backdrop of 71 oil and gas discoveries made in 21 exploration blocks. There has been accretion of in place hydrocarbon reserves of more than 600 Million Metric Tonne of Oil Equivalent (MMTOE). Under NELP regime, major natural gas production in KG basin commenced from April, 2009. With this, the gas production in India would be doubled as against production of 2008-09. Total committed investment in NELP rounds for exploration so far is around 10 billion dollars and actual investment made is around $11.9 billion ($5.3 billion in exploration and $6.6 billion in development). Further, the commercial production of CBM commenced in Raniganj block with effect from July, 2007. He also gave details on Bid Evaluation Criteria, Fiscal and Contractual terms for NELP-VIII and CBM-IV bid rounds emphasising on the changes which have been brought about to make the system simpler and also to meet the requirements of industry.
Sanjiv Arora , Consulate General of India at Houston, in his welcome address mentioned on opportunities and potential for exploration and Government’s efforts to accelerate the exploration coverage and increased oil and gas production. In particular, he highlighted the conducive policy environment for investors and the continuous interaction with the industry to facilitate industry’s operations in the petroleum sector. He emphasized all the E&P companies present at the Road show to take advantage of opportunities in the present bid round and invest in these offered blocks.
Doug Hengel, Deputy Assistant Secretary of Energy Government of USA emphasised the E&P companies to invest in India and become partner in its quest for exploration & Exploitation of hydrocarbons.
S.K.Srivastava, Deputy DG, DGH made a presentation on Geological prospectivity of NELP-VIII and CBM-IV blocks. V. K. Dewangan Director in the Ministry of Petroleum and Natural Gas made the concluding remarks and vote of thanks.
To facilitate data viewing by exploration and production companies, the government of India has opened a data centre at NOIDA, India and at other centres at Houston, London, Calgary and Perth, the data centres will be available on request. The data for NELP-VIII &CBM-IV can be viewed by companies at any of these centres as well as online through website and thereafter interested companies may purchase data.
Promotional Roadshows for NELP-VIII and CBM-IV have been planned also at Calgary (August 24-25, 2009) London (September 8-9, 2009), Perth (September 22, 2009) and Brisbane (September 24-25, 2009).
In the roundtable held on the sidelines of the Road show, V.K. Sibal highlighted the geological prospectivity of the blocks as well as the contract monitoring system prevalent under PSC regime. Joint Secretary Shri Raju noted that the Indian Economic growth has been at a high level. In spite of global economic meltdown, the growth momentum continues. The momentum which began in the 1980’s is sustained over a long period of time with occasional dips. Since 2005, growth has been in the region of 7.5 to 9.5%. This shows the resilience of Indian economy.
The bid closing date for NELP-VIII and CBM-IV is October 12, 2009. It is expected that NELP-VIII and CBM-IV bid rounds would result in a very good response from E&P companies and prospective investors as they are likely to avail of the excellent investment opportunities being offered through NELP-VIII and CBM-IV. Government is committed to complete evaluation, award and signing of production Sharing Contracts in a reasonable time frame and the whole process would be completed in a transparent manner as demonstrated in past rounds of NELP &CBM.