Ministry sticks to deadline and announces NELP winners on time

Vol 3, PW 25 (19 Jan 00) Exploration & Production
     

For seasoned observers of Indias upstream oil and gas sector, it seemed almost too good to be true.

On (Thursday) 6th January the countrys Cabinet Committee on Economic Affairs (CCEA) formally announced the award of 25 exploration blocks to a handful of domestic and overseas explorers. A list was also circulated on the same day for publication in the press.

An expanded version appears below. The awards themselves will come as no surprise to readers of this report.

Weeks ago we successfully predicted that Cairn Energy would win control of the prized D5 deepwater concession and that ONGC and Reliance Petroleum would each win control of 8 and 12 blocks respectively. We also predicted that a consortium of Energy Equity Corporation, Mosbacher and Hindustan Oil Exploration Company (HOEC) would win a block, as would GAIL/Gazprom and Oil India, who were awarded a block each.

What is remarkable is the oil ministrys clear determination to put the foot-dragging of past years behind it and proceed apace as never before. A source involved in the licensing round tells this report the winners have been given a strict deadline of (Tuesday) 25th January to submit their comments on the model Production Sharing Contract (PSC), which will form the basis of negotiations.

Oil ministry officials aim to sign all 25 PSCs by the end of March this year. If PSCs are signed by the deadline, Indias exploration sector could receive a much-needed boost as companies embark on the first phase of their exploration programmes.

One estimate predicts the sector will generate at least $250m of new business over the next two years.

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