India to launch sixth round of bidding for oil and gas blocks in January

Sep 19, 2005 02:00 AM

The Indian government will launch the sixth round of bidding for oil and gas blocks under the new exploration licensing policy (NELP) next January even as it works out a policy framework for moving towards open acreage system.
"NELP-VI will be off the ground in January," Petroleum Minister Mani Shankar Aiyar said at the Petrofed seminar on “review of exploration and production licensing policy”.

He said the NELP policy has been in existence for eight years now and cannot be called a new licensing policy.
"Either this policy has to be replaced by a newer policy or this be changed into an old licensing policy."
"We want to move towards open acreage system where blocks are available through out the year and companies can at their convenience pick and choose the block they want and submit bids to the government," he said.

Under NELP, the government announces certain blocks which are open for bidding for a certain period. Under the open acreage policy, blocks would be available throughout the year and companies can visit data room anytime and if they find any block attractive, they would bid for it.
As a first step towards the open acreage system, the government has mooted the idea of setting up a national data repository, where data from all the already awarded (explored and producing) and the new ones to be awarded would be stored for public viewing.
"We have called for industry comments and would be finalising the policy shortly," Aiyar said.

Participants at the industry meeting called for setting up of a national database where all companies, private and public sector, would necessarily have to contribute at least the raw data (2d and 3d seismic surveys) for viewing of others. Such a database would provide a fair idea of the regional geology.
Some participants wanted the discovered and producing oil fields of public sector Oil and Natural Gas Corp (ONGC) also put for bidding together with the new exploration acreage under NELP.

Aiyar said the government has nottaken any view on the subject and these were just opinions of certain individuals, which it may or may not subscribe.
"ONGC is single most important producer which has changed India from being world renowned hydrocarbon poor country to world renowned hydrocarbon potential country. They are doing a very good job. But is it enough for energy security of the country? We need them to do very, very, very, very good job for the country," he said.

The government has issued orders regulating supply of domestic cooking gas (LPG) to check diversion of hugely subsidised cooking fuel for commercial use, Petroleum Minister Mani Shankar Aiyar said.
"We find that there is a great deal of diversion of hugely subsidised domestic LPG to unauthorised users including commercial establishment, restaurants and automobiles," he told.

LPG for commercial use is priced at market rates, which are at least Rs 100 per cylinder more than the retail price of domestic LPG.
"We have taken a conscious decision that we shouldrestrict the number of refills available with the LPG distributor to the customer base in his area. The deliberate restriction is to ensure demand of genuine domestic consumers is met and pilferage checked," he said.

Aiyar said despite the regulation, some areas might be facing shortage as LPG distributors continue to divert the cylinders meant for genuine domestic consumers to commercial users.
Ceiling of LPG connection based on the customer database has been set for every distributor and new connections are issued only if the present customer base was lower than the ceiling, he said.

The Petroleum Minister said last year the LPG shortage was due to non-availability of LPG cylinders which was compounded due to spiralling steel prices.
"We have sorted that problem out. Distributors can issue new connections till the ceiling (as decided by the customer database). Distributors are not allowed to release new connections if the connection already issued are at the ceiling," he said.

Aiyar said needs of genuine customers would be met and asked the public to report cases where the distributor was not meeting their needs. Customers can air their grievances through local representatives and media.
"We will take strict action," he said.

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