India Holds Back Clearances for 52 O&G Blocks

India Holds Back Clearances for 52 O&G Blocks

NEW DELHI - India is holding back clearances for more than a fifth of the exploratory blocks it has auctioned in various rounds since 1999 to domestic and overseas energy explorers due to defense, environmental and maritime boundary issues.

The delay is hurting the nation's plans to expedite exploration of its oil and gas assets and ramp up local output to cut its import bill and may threaten investments by overseas explorers in the country's energy sector.

"Presently, 52 blocks awarded under various rounds of New Exploration Licensing Policy bidding are pending clearance by different organizations such as the Ministry of Defence, Ministry of Environment and Forests, Ministry of External Affairs and state governments," Oil Minister Jaipal Reddy told lawmakers in a written reply in the lower house of Parliament.

Of the 52 blocks awaiting clearances, 22 are operated by Oil & Natural Gas Corp., 15 by Reliance Industries Ltd., five by BHP Billiton Ltd., three by Cairn Energy PLC, two by Santos Ltd. and one each by BG Group PLC, BP PLC and ENI S.p.A.

Under nine auction rounds, India has awarded 249 blocks. But so far, discoveries have been made in only 36 blocks.

Mr. Reddy said clearances for larger areas from which these blocks are carved out are always obtained from other ministries before offering them for bidding. But for the 52 blocks, the companies will have to seek additional approvals from the related ministries of defence, environment and foreign affairs to start or resume exploratory work.

The Indian and foreign companies have already invested $12.4 billion for exploration and development activities in these blocks, he said.

India, which saw its crude-oil import bill jump 48% on year to 6.72 trillion rupees ($121.76 billion) in the fiscal year ended March 31, is seeking to trim it by ramping up local output with the help of global oil and gas exploration companies and by acquiring assets overseas.

However, the government's control over pricing and marketing of its natural resources and lengthy approval processes for exploration blocks have made overseas investors jittery and lose interest in the country's energy sector.

India's Mint newspaper last month reported that the oil ministry had warned the prime minister's office that non-clearance of blocks could lead to an exodus of foreign companies that were brought in with assurances of a conducive investment environment as well as litigation and claims of damages.

Copyright (c) 2012 Dow Jones & Company, Inc.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies
 Company: BHP Billitonmore info


 - 'You Wouldn't Do It': BHP Chair Regrets $20 Billion on Shale (Jun 29)
 - Woodside Sees Output Growing 15 Pct Over Next Three Years (May 23)
 - BHP Billiton Puts US Shale Gas Assets On The Block Again (Apr 26)
 Company: BP plcmore info


 - BP Says It Is Considering IPO of US Pipeline Assets (Jul 18)
 - Total, BP Unit, YPF Boost Investment in Argentina's Vaca Muerta (Jul 18)
 - Big Oil Sees Salvation in Gas, But What If It's a Wrong Bet? (Jul 18)
 Company: Cairn Energymore info


 - Cairn Energy: SNE-5 Appraisal Well Hits Oil, Gas (Mar 7)
 - AkerBP, Cairn Energy Make Jefferies Top Pick List (Jan 9)
 - ConocoPhillips Confirms FAR Holds Pre-Emption Right for Senegal Project (Aug 23)
 Company: Santos Ltd.more info
 - Australia Plans LNG Export Limits to Help Ease Local Price Pain (Apr 27)
 - Australia's Santos To Focus On Long-Life Gas In Growth Push (Dec 8)
 - Gas Producer Santos Needs to Impress as China's ENN Eyes Strategy (Dec 4)
 Company: BG Groupmore info
 - Shell Mulls LNG-Hub Network as Use by Ships and Trucks Expands (Jul 11)
 - Tanzania Laws Would Allow Govt to Tear Up Mining, Energy Deals (Jun 29)
 - Despite Cuts, Big Oil to Expand Production into the 2020s (Sep 5)
 Company: ONGCmore info


 - India Refiner HPCL Sees More Scope For Foreign Buys After ONGC Deal (Jul 20)
 - India Approves Creation of State Oil Giant in $4.6 Billion Deal (Jul 19)
 - India Wants $300 Billion in Oil Spending to Meet Growing Demand (Jul 12)
 Company: ENImore info


 - Mexico Delays Next Oil Auction to Let Huge New Find Sink In (Jul 17)
 - Trump Administration Approves Eni Plan To Drill Offshore Alaska (Jul 13)
 - Total To Drill For Gas Off Cyprus Despite Collapse Of Peace Talks (Jul 12)
 Company: Reliance Industriesmore info
 - India's Reliance Industries' 1Q Standalone Profit Up 9%, Tops Estimates (Jul 20)
 - BP, Reliance to Revive India Investments After Eight Years (Jun 15)
 - Reliance's Upstream Revenue in 1Q FY17 Declines 34.8% YOY to $200M (Jul 18)
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Sr. Project Manager
Expertise: Project Engineer|Project Management
Location: Odessa, 
 
Administrative Assistant IV
Expertise: Executive|Secretarial or Administrative
Location: Houston, TX
 
US Houston: Account Rep, Bus Dev
Expertise: Business Development|Marketing|Sales
Location: Houston, TX
 
search for more jobs

Brent Crude Oil : $50.97/BBL 1.53%
Light Crude Oil : $48.75/BBL 1.79%
Natural Gas : $2.92/MMBtu 0.68%
Updated in last 24 hours