The Government of India carried out an effective promotional campaign in London on September 8, 2009 showcasing 70 exploration blocks on offer under the eighth bid round of the New Exploration Licensing Policy (NELP-VIII) and fourth bid round of coal bed methane policy (CBM-IV). The blocks comprise of 28 in deepwater, 24 in shallow water and 18 in onland, out of which 10 are Type-S blocks( area of 200 square kilometers or less).
After the road shows held at Mumbai on August 8, 2009, Houston August 20, 2009) and Calgary (August 24, 2009), the London road-show is the fourth one to be held for NELP-VIII & CBM-IV.
Murli Deora, Minister of Petroleum & Natural Gas has assured that the process of awarding exploration blocks under NELP-VIII and CBM-IV will be completed within four months from the receipt of bids. The bids are expected to be finalized for award by mid December 2009 and the production sharing contract will be signed in another two months.
Delivering a key note address, he highlighted that the year 2009 has been remarkable in many ways for the hydrocarbon sector in India as this year marks two historic milestones for the country.
The first has been the coming on stream of the big KG D 6 gas discovery made by Reliance Industries Limited in the deep waters off the coast of Andhra Pradesh in April 2009. With a peak production of 80 MMSCMD and doubling India’s gas production in the current year, KG D 6 is all set to change the perspective of the geological prospectivity of the country.
The second has been the remarkable effort of Cairn India Limited in bringing the Barmer Discovery to production which was inaugurated by the Prime Minister of India on August 29, 2009. This find with a plateau production of 175,000 bopd, at one stroke adds 20% to the country’s oil production.
He expressed confidence that NELP with almost 200 blocks already under operation was set to change the oil and gas landscape of India. More remarkably, both these events represent the coming of age of the non-Government companies in India’s E&P sector and are testimony to the grit and confidence of India’s growing private sector.
Deora remarked that with India’s high import dependence of nearly 75% for oil requirements, the exploration for oil and gas through improved terms under NELP as well as CBM is a national priority. The past ten years of this policy have delivered results that have made countries round the world sit up and take notice of the significance of India as an emerging oil and gas destination. With a large under explored area, the country offers an excellent investment opportunity at attractive terms which are comparable with the best in the world.
So far, 71 hydrocarbon discoveries have been made under NELP and over 4.5 billion barrels of in-place reserves have been established. However, large unexplored areas in a country with 3.14 million square kilometers of sedimentary area offer great potential to investors. He emphasized the highly attractive opportunities being offered under NELP-VIII &CBM-IV. He impressed upon companies to participate in the bidding process to enter into a long term beneficial relationship by becoming part of India’s growing and vibrant petroleum sector.
S.Sundareshan, Additional Secretary in Ministry of Petroleum and Natural Gas stressed his firm belief that despite the global economic downturn, oil and gas will continue to remain as prime energy resources and thus, important for a majority of nations. While it is true that some E&P companies are reorienting their priorities and strategies to cope up with the challenges of the downturn, they are conscious of the importance of investing in oil and gas which is a sound long-term strategy. It is for this reason, and also for the reason that substantial oil and gas is yet to be discovered in India that he was optimistic of the possibility of this round of NELP and CBM attracting many prospective bidders. He highlighted that the Government of India has provided a level playing field to all the companies to compete on equal terms for award of exploration acreage. The attractive terms and conditions of the production sharing contracts are an added incentive for bidding companies.
Some of the major stakeholders in India’s upstream petroleum sector namely BG Group, BP Plc, Oil & Natural Gas Corporation Limited, Cairn Energy Plc and Reliance Industries Limited made presentations during the London road show about their experiences in India and also about their plans and vision regarding India’s petroleum sector, especially the upstream sector. They emphasized the strong fundamentals as well as the attractiveness of the E&P sector in India and concluded that the investment climate in India was indeed positive with very attractive fiscal terms under NELP & CBM.
The bid closing date for NELP-VIII & 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.