INDIAN ELECTIONS WILL DELAY BID APPROVAL FOR NELP

Vol 3, PW 14 (04 Aug 99) People & Policy
     

Imminent elections may delay the approval process of bids submitted under the New Exploration Licensing Policy (NELP).

There is no indication that the deadline of August 18th will be put back, despite innumerable reports to the contrary. But elections, held in stages between September 4th and October 1st (with a result due on October 6th) will most likely result in delay to the approval process.

A new government is possible, or at the very least, a new oil minister. Each will take time to settle in to the job.

A source in the oil ministry tentatively predicts that successful NELP bids will be approved by a new Indian cabinet - BJP or otherwise - by November this year. His confidence, as we know from past experience, may be optimistic.

When bids are opened at 1500 hours Indian Standard Time (IST) in the offices of the Directorate General of Hydrocarbons (DGH) in New Delhi they will follow a tortuous route of approvals, and counter approvals, that will eventually land them at the table of a new cabinet. After "technical evaluation" at the DGH, the bids will go to the "contract cell" of the oil ministry; from where they will go to a "Committee of Secretaries".

This group will then return them with "comments", valid or otherwise. At the oil ministry they will go to the oil minister, who if "happy with the terms", will recommend approval at a meeting of the Indian cabinet.

One consolation is that if Ramamurthy remains as oil minister (highly unlikely) and the BJP stays in power (most likely) the process will be quicker than if a new government comes to power. At present, there are too many variable to make an accurate prediction.