Ministry set to issue 'Petroleum Exploration Licence'

Vol 4, PW 13 (02 Aug 00) Exploration & Production

The Indian oil ministry is set to award 20 Petroleum Exploration Licenses (PEL) to successful bidders for acreage won under the New Exploration Licensing Policy (NELP).

It is understood the PELs will be awarded this week or next, in a move likely to be welcomed by oil service contractors who can now move into action. This report learns that only one PEL (to Cairn Energy) has so far been issued since contracts for 22 of the 25 awards were signed on April 12th this year.

Oil ministry officials defend the delay in awarding the PELs by blaming the winning consortia for delay in sending in their applications. "Reliance sent their application in six weeks after the contract was signed," learns Petrowatch, "Delay is not only from our side." In India offshore exploration concessions requires a PEL from the central government in Delhi while onshore acreage requires state authorities to issue a PEL, albeit on a recommendation from the central government.

Under NELP, Reliance signed PSCs for 12 offshore blocks, ONGC for seven, Oil India for one, and Cairn Energy for one. A PSC for the offshore Gazprom-GAIL block is yet to be signed (see below).

Reliance's delay in submitting its application has sent the oil industry rumour mill into overdrive, with questions asked about the company's future 'farm-in' plans or (un)willingness to foot the entire exploration bill. Petrowatch understands the delay has a more innocuous reason.

Reliance was busy trying to acquire existing data of the blocks promised by ONGC and the DGH before proceeding with its application. This report understands that the company does not - for now at least - plan on inviting others to 'farm-in' to its 12 concessions.