March 27, 2002

    Shri Naik expressed great pleasure in announcing the offer of 27 blocks for exploration of oil and gas under the third round of New Exploration Licensing Policy (NELP-III) at a Press Conference today in New Delhi.

    The 27 blocks on offer include 11 onland blocks falling in the States of Andhra Pradesh, Assam, Bihar, Gujarat, Himachal Pradesh, Madhya Pradesh, Mizoram, Nagaland, Rajasthan, Tripura and West Bengal, also 9 Deep Water blocks and 7 Shallow Water blocks, located on both East and West Coasts. The formal Notice Inviting Offers (NIO) for NELP-III would be released through Press on 28^th March 2002. The last date for submission of bids would be 28^th August 2002. This period of about five months has been provided to the companies for submission of bids. This period has been provided to accommodate the request of companies in the past as well as on the suggestion of Schlumberger – CWC Associates, Marketing Consultants for promoting NELP-III.

    Shri Naik mentioned that the highlights of NELP-III were as under :

1. Transparent bidding process with weightages of parameters being made public through Notice Inviting Offers (NIO). Bids will be evaluated based on the technical capability (weightage 6%) and financial strength (weightage 4%) of the bidding company or consortium, committed work programme (weightage 60%) and the fiscal package (weightage 30%). Out of these parameters, work programme commitment for exploration phase-I will have the maximum weightage.
2. Offer of blocks from petroleum rich States like Andhra Pradesh, Assam, Gujarat, Nagaland, Rajasthan and Tripura.
3. New and upgraded data packages available in digitised form.
4. Blocks with new data offered on the East Coast and the Southern Tip of India.
5. Creation of web-site for NELP-III to facilitate investors to access the information on the third round. The details on NELP-III may be seen at the web-site of Ministry of Petroleum and Natural Gas www.petroleum.nic.in and at the web-site of Directorate General of Hydrocarbons (DGH) www.dghindia.org
6. Revised Model Production Sharing Contract (MPSC) for NELP-III prepared after consultation with E&P companies and relevant organisations.

    The launch of NELP-III is significant as realisation of the India Hydrocarbon Vision-2025 that 100% of the sedimentary basins of India will be appraised to assess the hydrocarbon potential in the country. In the first two rounds of NELP, around 16% of the sedimentary areas have been covered. The area proposed under NELP-III is about 9% more of the total sedimentary area of the country. Shri Naik mentioned that area covered under exploration in the two rounds of NELP constitutes about 60% of the total area covered by the Petroleum Exploration Licenses (PELs) in the country. This is a significant achievement. Together with the third round, the area under NELP would be 70% of the total PEL areas.

    Government of India has signed 47 contracts under the earlier two NELP offers. These include 39 offshore and 8 onland blocks. The estimated expenditure in these 47 blocks covering the three exploration phases is about Rs.9,300 crores. The exploration effort has also shown encouraging success as discoveries have been made in the Krishna-Godavari deepwater block of Cairn Energy. With the envisaged exploration programme, more discoveries are expected in near future.

    In order to give effective promotion to NELP-III, Government of India has planned roadshows at five locations starting from Delhi on 9th April, Singapore on 27^th – 28^th May, London on 6th – 7th June, and Houston on 10^th-- 11th June, culminating at Calgary on 13th – 14th June, 2002.

    Shri Naik brought out that award and signing of the contracts under NELP-II were completed in a record time-frame of 3-1/2 months, which demonstrated the fast decision making process in the Government. The NELP II bids closed on 31^st March 2001 and the contracts were signed on 17^th July 2001. He mentioned that this trend would continue and Government will make every effort to expedite completion of the bidding process for NELP-III.

    In order to facilitate potential investors, data centres are being opened at New Delhi, London and Houston. The NELP-III data may be viewed at any of these three centres and thereafter the interested companies may purchase data from the DGH office at New Delhi.

    Shri Naik stressed that India offers internationally one of the most attractive fiscal and contractual terms. In fact the MPSC followed by India has found wide acceptance among the E&P companies. This year, the Union Budget proposes to bring down the income-tax rate for foreign companies from 48% to 40%. This incentive would further improve the fiscal terms for foreign investors as compared to NELP-I and II.

    The current year is a historical landmark for the petroleum sector in India. The petroleum sector is being deregulated w.e.f. 1^st April 2002. This landmark event is expected to provide a strong, efficient and competitive petroleum sector as also provide better service to the customers, make available competitively priced products and allow better choice to the consumers, Shri Naik said.

    Shri Naik expressed the hope that NELP-III would get good response and companies would avail this investment opportunity and participate in the vibrant petroleum sector of India.