Gujarat hurdle to next CBM licensing round

Vol 18, PW 1 (28 Aug 14) People & Policy

Gujarat’s insistence on sharing production revenue could delay the launch of the next CBM licensing round.

In July the DGH wrote to state authorities with a list of six CBM blocks in Gujarat it wants to include in CBM-V for which a formal date has yet to be fixed. In reply the state government this month (August) refused to grant No Objection Certificates (NOCs) for the six blocks unless it gets clarity on revenue sharing.

Anyone with a long memory will remember how in January this year Gujarat derailed the NELP-X licensing round for conventional oil and gas acreage when it withdrew NOCs for nine onland Cambay blocks. “Almost eight months have passed,” confirms an official in Gandhinagar, “and we’re still waiting for Delhi’s answer.

” NELP-X and CBM-V will be held under a new revenue-sharing regime where whoever offers the highest slice of oil and gas production to the government wins the block. “We want a share of this revenue,” adds our Gandhinagar source.

“We had no option but to withdraw the NOCs.” Gujarat may be forced to back down from its aggressive posturing if Prime Minister Narendra Modi intervenes.

“Can anyone in Gujarat really stand up to Modi?” asks one source. Still unclear is whether the CBM-V and NELP-X rounds will be held independently or clubbed together and held under a new uniform licensing policy to replace the NELP regime.