India Approves Award of 33 Oil and Gas Blocks

NEW DELHI (Dow Jones), Mar. 19, 2010

The Indian government Friday approved the award of 33 oil and gas blocks for exploration, nearly six months after the blocks were auctioned under a federal policy that aims to increase the country's fuel production and reduce dependence on imports.

The 33 blocks are part of the 36 bid in the eighth round of auction under the New Exploration Licensing Policy, or NELP, in October 2009, Home Minister P. Chidambaram said in a media briefing about the decisions of the federal cabinet and a cabinet panel.

India had launched the NELP in 1999, offering exploration blocks through competitive bidding to state-run and private-sector companies. The South Asian nation imports more than three-fourths of its crude oil needs and has been trying to increase local output, but the NELP has largely failed to attract global energy giants and most blocks have been awarded to local companies.

In the eight round of auction, India offered 70 blocks and received 76 bids for only 36 blocks. State-run Oil and Natural Gas Corp. and its partners have been awarded 17 of the 33 blocks.

Of the eight bids received for 24 deepwater blocks on offer, ONGC and partners won seven and Cairn Energy PLC of the U.K. got one.

Of the 13 bids for 28 shallow water blocks on offer, ONGC got five as lead partner and one with Oil India Ltd as an operator. BHP Billiton Petroleum won three and Cairn Energy bagged one block.

ONGC also won four onland blocks. India had auctioned a total 18 onland blocks and received bids for 15 blocks.

The government approval paves the way for the oil companies to firm up their exploration plans for the awarded blocks, enter into production sharing contracts with the federal oil ministry and seek further statutory clearances.

Copyright (c) 2010 Dow Jones & Company, Inc.