Thaindian News

New Delhi, Nov 20 (IANS) India Thursday approved a set of 44 hydrocarbon blocks to be awarded to bidders in the latest round of auction, with contracts to share production with state-run oil companies expected to be signed within a month.The approval for the award of contracts under the seventh round of what is called the new exploration licensing policy (NELP) was given during the meeting of the cabinet committee on economic affairs, presided over by Prime Minister Manmohan Singh here.

“The total investment for Phase-I of exploration for these 44 blocks is about $1.5 billion,” Minister of State in the Prime Minister’s Office (PMO) Prithviraj Chavan told reporters after the meeting.

“It is expected that the award of blocks under NELP-VII will result in more discoveries and further investments in the development of oil fields, leading to higher reserves accretion and eventually, production of oil and gas,” Chavan added.

The meeting also decided that in view of a very low score for a Mumbai basin deepwater block, the sole bidder should be denied a contract as it would be detrimental to the government’s interests in terms of future profits.

The government had launched the seventh round of auctions under its new policy on Dec 13 last year, offering 57 exploration blocks covering an area of 171,000 sq km.

The blocks included 19 in deep sea, nine in shallow water and 29 on-land.

The government, which opened the bids June 30, received 181 proposals for 45 blocks not only from the state-run oil companies, but also from domestic private sector and foreign firms.

“A total of 95 companies, including 74 Indian companies and 21 foreign companies had submitted bids for 45 blocks,” said a statement issued by the ministry of petroleum and natural gas.

An Empowered Committee of Secretaries considered the evaluation of bids and made its recommendations to the cabinet committee on economic affairs, which formally cleared them Thursday.

Even though India has emerged a net exporter of petroleum products, it imports some 70 percent of its crude oil needs.

As per government data, the country has crude oil reserves of 725 million tonnes and natural gas reserves of 1,055 billion cubic metres. The consumption of petroleum products during 2007-08 was 118.83 1 million tonnes.