DGH reviews the need for technical criteria in NELP-VII

Vol 11, PW 3 (14 Jun 07) Exploration & Production

Expect to see a radical change in the way the DGH evaluates bids for acreage in the next licensing round.

DGH boss VK Sibal confirms to PETROWATCH that a proposal to eliminate â€کtechnical eligibility’ requirements from the Bid Evaluation Criteria (BEC) for onland and shallow water blocks is “under review.â€‌ In all of India’s licensing rounds to date, evaluation of the technical capability of bidders, plus an assessment of fiscal strength and the work programme were critical in deciding awards.

“No formal decision has yet been taken,â€‌ stresses Sibal. “But if the decision to eliminate technical eligibility is approved, it will apply only to onland and shallow blocks, not deep or ultra deepwater blocks.

â€‌ DGH willingness to review whether companies need to prove their technical competence for onland and shallow water blocks stems from three days of meetings with US-based consultancy Daniel Johnston & Co. “Johnston made a lot of sense,â€‌ says Sibal.

“Often you don’t need a company to carry out exploration. The future will belong to small groups of knowledgeable people and investors who bring value to the industry.

Technology can be bought off the shelf.â€‌ Sibal adds the DGH will have finalised the BEC by the end of the month (June) ready for the launch of NELP-VII in mid-August “at the very latestâ€‌ and is in the process of selecting a consultant to oversee the round.

On offer will be 80 or more onland and offshore blocks across 400,000-sq km, slightly more than the 325,000-sq km reported till now. DGH technicians are today busy defining the exact parameters of each block and preparing dockets that will be offered to bidders.

Among the areas under scrutiny are the Andaman Islands, where three to four blocks will most likely be offered. Sibal estimates that roughly between 11%-12% of the blocks on offer will be relinquished acreage from past rounds, or former ONGC and Oil India blocks where the PEL has ended.