The Cabinet on Thursday approved bids for 52 oil and gas exploration blocks under the sixth round of New Exploration Licensing Policy (NELP-VI), under which bids covered the largest expanse of area since the government opened up exploration in 1999.
Officials said investment of $ 6 billion would be required in the exploration phase of the round in which state-owned Oil and Natural Gas Corp (ONGC) was the leading winner, followed by Mukesh Ambani's Reliance Industries Ltd. (RIL).
ONGC bagged 24 blocks in consortium with other public sector companies and UK-based Cairn Energy, Finance Minister P Chidambaram told reporters after a meeting of Cabinet Committee on Economic Affairs.
RIL was the second largest beneficiary with 7 deepwater blocks in its kitty.
Other gainers included an Oil India Ltd-led consortium with 6 blocks; Gujarat State Petroleum Corporation and Naftogaz (3 each); Santos and Essar Oil (2 each); Focus, Petrogas, Cairn Energy, Prize Petroleum and Geoglobal (1 each). Of the 55 blocks offered in NELP-VI, three had not received any bids.
Production-sharing contracts for the 52 blocks will be signed in the first week of March. The government is expected to firm up its plans for the seventh round of bids under NELP by the middle of next month.
The NELP bids covered 11 per cent of the nation's sedimentary basin. The onshore area covered the length and breadth of the country from Mizoram in the remote north-east to the Cambay Basin in the west.
Petroleum Secretary MS Srinivasan said the government expected investment to the tune of $ 6 billion in the first phase of exploration in the 52 blocks approved. "Minimum work programme would entail an investment of $ 2 billion. With a minimum success rate, another $ 4 billion investment would be required," he stated.
VK Sibal, director-general of the upstream oil industry regulator) the Directorate-General of Hydrocarbons) said the NELP-VI was a "resounding success" with as many as 165 bids being put up for 55 blocks on offer. A maximum 10 bids were put up for a block, he added.
Responding to a charge that 'erratic financial bids' were being approved, Srinivasan said the government had taken into account the fact that large discoveries were becoming less common. "The government's interests were fully protected in getting a major share in the beginning. A bird in hand is better than two in a bush," he said.
On the lack of participation by US oil majors, he said the major success stories of oil exploration in India in the past few years have involved smaller companies. Oil recovery rates have improved over the years, he said.
The petroleum secretary said it was necessary to define the past performance of a company while including it as a criterion to evaluate bids. "A clear definition of past performance would result in transparent decision-making. We will be addressing the issue in NELP-VII," he stressed.