India Licensing Round Report
Friday, June 26, 2009
On 9 April 2009, the Indian Ministry of Petroleum & Natural Gas (MOP&NG) launched the Eighth Round of New Exploration Licensing Policy (NELP) and the Fourth Round of Coal Bed Methane (CBM IV).
Under the CBM IV round, 10 blocks covering an area of 5,040 square kilometres in six states are on offer.Under the NELP VIII round, 70 exploration blocks covering an area of 163,535 square kilometres in 11 sedimentary basins are on offer.
Fourth Round of Coal Bed Methane (CBM) |
Coal Field | Block Name | Area (sq km) |
Raj Mahal | RM(E)-CBM-2008/IV | 1128 |
Talchir | TL-CBM-2008/IV | 557 |
Ib Valley | IB-CBM-2008/IV | 209 |
Singrauli | SR(W)-CBM-2008/IV | 269 |
Sohagpur | SP(NE)-CBM-2008/IV | 339 |
Satpura | ST-CBM-2008/IV | 714 |
North East | AS-CBM-2008/IV | 113 |
Wardha | WD(N)-CBM-2008/IV | 442 |
Wardha | WD(E)-CBM-2008/IV | 503 |
Mannargudi | MG-CBM-2008/IV | 766 |
Of these 70 blocks, 24 are located in deep waters (>400 metres), 28 are located in shallow waters and 18 are onshore blocks.
Eighth Round of New Exploration Licensing Policy (NELP VIII) |
|
Block Name | Basin Name | Area (sq km) |
AA-ONN-2009/1 | ASSAM ARAKAN | 2217 |
AA-ONN-2009/2 | ASSAM ARAKAN | 1740 |
AA-ONN-2009/3 | ASSAM ARAKAN | 84 |
AA-ONN-2009/4 | ASSAM ARAKAN | 84 |
AN-DWN-2009/1 | ANDAMAN | 4981 |
AN-DWN-2009/10 | ANDAMAN | 4014 |
AN-DWN-2009/11 | ANDAMAN | 4024 |
AN-DWN-2009/12 | ANDAMAN | 4021 |
AN-DWN-2009/13 | ANDAMAN | 4007 |
AN-DWN-2009/14 | ANDAMAN | 4014 |
AN-DWN-2009/15 | ANDAMAN | 3518 |
AN-DWN-2009/16 | ANDAMAN | 3524 |
AN-DWN-2009/17 | ANDAMAN | 4034 |
AN-DWN-2009/18 | ANDAMAN | 4040 |
AN-DWN-2009/2 | ANDAMAN | 3995 |
AN-DWN-2009/3 | ANDAMAN | 3992 |
AN-DWN-2009/4 | ANDAMAN | 3990 |
AN-DWN-2009/5 | ANDAMAN | 4002 |
AN-DWN-2009/6 | ANDAMAN | 3999 |
AN-DWN-2009/7 | ANDAMAN | 4009 |
AN-DWN-2009/8 | ANDAMAN | 4006 |
AN-DWN-2009/9 | ANDAMAN | 4017 |
CB-ONN-2009/1 | CAMBAY | 113 |
CB-ONN-2009/2 | CAMBAY | 68 |
CB-ONN-2009/3 | CAMBAY | 90 |
CB-ONN-2009/4 | CAMBAY | 69 |
CB-ONN-2009/5 | CAMBAY | 165 |
CB-ONN-2009/6 | CAMBAY | 177 |
CB-ONN-2009/7 | CAMBAY | 144 |
CB-ONN-2009/8 | CAMBAY | 136 |
CY-OSN-2009/1 | CAUVERY | 1362 |
CY-OSN-2009/2 | CAUVERY | 1621 |
CY-OSN-2009/3 | CAUVERY | 2385 |
GK-OSN-2009/1 | GUJARAT- KUTCH | 1264 |
GK-OSN-2009/2 | GUJARAT- KUTCH | 1242 |
HF-ONN-2009/1 | HIMALAYAN FORELAND | 1930 |
KG-DWN-2009/1 | KRISHNA GODAVARI | 1800 |
KG-OSN-2009/1 | KRISHNA GODAVARI | 1472 |
KG-OSN-2009/2 | KRISHNA GODAVARI | 1471 |
KG-OSN-2009/3 | KRISHNA GODAVARI | 1988 |
KG-OSN-2009/4 | KRISHNA GODAVARI | 835 |
KK-DWN-2009/1 | KERALA KONKAN | 5349 |
KK-DWN-2009/2 | KERALA KONKAN | 5361 |
KK-DWN-2009/3 | KERALA KONKAN | 5374 |
KK-DWN-2009/4 | KERALA KONKAN | 5390 |
KK-OSN-2009/1 | KERALA KONKAN | 2004 |
KK-OSN-2009/2 | KERALA KONKAN | 1860 |
KK-OSN-2009/3 | KERALA KONKAN | 1874 |
KK-OSN-2009/4 | KERALA KONKAN | 2475 |
KK-OSN-2009/5 | KERALA KONKAN | 2088 |
KK-OSN-2009/6 | KERALA KONKAN | 2107 |
KK-OSN-2009/7 | KERALA KONKAN | 1914 |
KK-OSN-2009/8 | KERALA KONKAN | 2295 |
KK-OSN-2009/9 | KERALA KONKAN | 2032 |
MB-DWN-2009/1 | MUMBAI | 2961 |
MB-OSN-2009/1 | MUMBAI | 2299 |
MB-OSN-2009/2 | MUMBAI | 1635 |
MB-OSN-2009/3 | MUMBAI | 1492 |
MB-OSN-2009/4 | MUMBAI | 1309 |
MB-OSN-2009/5 | MUMBAI | 1477 |
MB-OSN-2009/6 | MUMBAI | 1876 |
MB-OSN-2009/7 | MUMBAI | 1865 |
VN-ONN-2009/1 | VINDHYAN | 1405 |
VN-ONN-2009/2 | VINDHYAN | 1562 |
VN-ONN-2009/3 | VINDHYAN | 1250 |
WB-ONN-2009/1 | BENGAL | 1519 |
WB-ONN-2009/2 | BENGAL | 1887 |
WB-OSN-2009/1 | BENGAL | 2621 |
WB-OSN-2009/2 | BENGAL | 1915 |
WB-OSN-2009/3 | BENGAL | 1695 |
Eighth Round of New Exploration Licensing Policy (NELP VIII)
Map: Blocks offered under the Eighth Round of the New Exploration Licensing Policy (red shading). Source: PetroView®
Roadshows for the licensing round will be held in Mumbai (India), Brisbane (Australia), Perth (Australia), London (UK), Houston (USA), Washington (USA) and Calgary (Canada). The roadshows, originally scheduled between April to May 2009, have been postponed until further notice.
Data packages for the blocks can be purchased directly from Directorate General of Hydrocarbons (DGH). Companies are required to submit their bids by 10 August 2009. Results of the bids are expected to be announced by December 2009. Bid documents and further details of the round are available from the NELP VIII website (http://www.indianelpviii.com/ )
The Policy for Coal Bed Methane (CBM) was formulated in 1997 and a model contract and bid documents were drafted in 1998. The prospective blocks were carved in 1999-2000 and the first CBM round was launched in May 2001. To date, three rounds have been completed, with the latest round announced in April 2009.
Highlights of some of the terms of the CBM policy are:
- no participating interest of the Government;
- no signature bonus;
- an option to walk out at the end of Phase 1 and 2;
- freedom to sell gas in domestic market at market determined price; and
- an income tax holiday for seven years from start of commercial production.
After three rounds of CBM bidding, 26 blocks covering an area of 13,600 square kilometres have been awarded and the first commercial production from CBM commenced from 14 July 2007.
The New Exploration Licensing Policy (NELP) was formulated in 1997-1998 to boost hydrocarbons exploration in the country by providing a level playing field where exploration licences would be granted through an international competitive basis to foreign and national oil companies.
NELP was first implemented in January 1999 and to date, seven rounds have been completed with the eighth round launched in April 2009.
Some of the salient features of the NELP include:
- freedom for operators to market crude oil and gas in the domestic market at market determined price;
- up to 100% participation by foreign companies;
- no signature, discovery or production bonus;
- income tax holiday for seven years from start of commercial production ;
- no mandatory state participation; and
- biddable cost recovery limit up to 100%.
Under NELP, 203 production sharing contracts have been signed and multiple players are operating in Indian sedimentary basins. The area under exploration has increased more than four times from 0.35 million square kilometres in 2000 to 1.50 million square kilometres in 2009 with 70 hydrocarbon discoveries.
An issue of contention under NELP VIII is the applicability of tax holiday to commercial production of natural gas. In the Union budget of 2008-09, the finance ministry defined “mineral oil” for the purpose of Section 80 IB (9) of Income Tax Act, 1961 to exclude natural gas. This meant that the tax holiday, one of the salient features under NELP, was only for crude oil production and not natural gas, contrary to the Government’s commitment while attracting investment under NELP.
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