The Hindu : Business : Centre to offer 20 oil blocks in fifth round

Online edition of India's National Newspaper
Saturday, Nov 27, 2004

Business

Business

Centre to offer 20 oil blocks in fifth round

By Our Special Correspondent

NEW DELHI, NOV. 26. The Union Petroleum Minister, Mani Shankar Aiyer, today said the Government would offer 20 oil and gas exploration blocks in the fifth round of bidding under the New Exploration Licensing Policy in January 2005.

"With a view to bringing more areas of the country under exploration and production of oil and gas expeditiously, steps have been initiated to offer blocks under the fifth round of NELP, which is expected to be launched in early January 2005, offering 20 exploration blocks, including onland, shallow offshore and deepwater blocks,'' he said at the consultative committee meeting of his Ministry.

In the first four rounds of NELP bidding, the Government has awarded 90 oil and gas blocks.

Mr. Aiyer said during last six months, Reliance Industries had made gas discoveries in two blocks — one off the Andhra coast and another off Orissa. The Gujarat State Petroleum Corporation had found oil in the State while Cairn Energy of the U.K. had made two oil discoveries in Rajasthan.

Besides intensifying exploration within the country, India was acquiring oil properties abroad to cut its dependence on imported crude oil, prices of which had spiralled during past few months.

ONGC Videsh had acquired assets in Sudan, Australia, Myanmar, Vietnam, Libya, Ivory Coast, Syria, Iraq, Iran and Russia, with an estimated investment of $3.5 billion, he said.

Now the Government had revised the target for oil and gas from overseas fields. The country was now targeting 20 million tonnes of oil and gas by 2010 instead of 2020 previously decided, Mr. Aiyer said.

He said India was eyeing oil properties in Saudi Arabia, Vietnam, Australia, Myanmar, Bangladesh, Iran, Iraq, Qatar, Kazakhstan, Syria, Egypt, Libya, Algeria, Senegal, Nigeria, Sudan and West Africa.

"In order to mobilise all our diplomatic experience and expertise to synchronise with our investments abroad, the Government has formed a 11-member Standing Advisory Committee on Diplomacy and Energy Security headed by the economist, Arjun Sengupta,'' he said.

The committee comprises former diplomats and has been entrusted with the task of facilitating security of oil and gas properties in oil-rich countries, particularly in West Asia.

Through a presentation the committee was told that as per International Energy Agency estimates, an increase of $10 a barrel in crude oil price would result in one per cent loss in India's GDP and 2.6 per cent increase in inflation the following year.

Ethanol-doped petrol

The Government has altered norms for the plan to run automobiles on ethanol-doped petrol due to poor ethanol supply, said Mr. Aiyer.

A new notification does not make it mandatory for oil companies to blend ethanol in petrol. Ethanol should be procured only if it is economical, he said.

The changes have been effected since during July the oil marketing companies reported short supply of ethanol in Maharashtra, Goa, Gujarat, Karnataka and Andhra Pradesh. Difficulties were also reported in finalising tender for future supply of ethanol in Uttar Pradesh and Uttaranchal.

The fresh notification makes "sale of ethanol-blended petrol" mandatory only when the price of sourcing indigenous ethanol for supply of ethanol-blended petrol is comparable to the price of indigenous ethanol for alternative uses and the delivery price of ethanol at the locations is comparable to the import parity price of petrol at that location.

A further condition stipulated is that the indigenous ethanol industry is able to maintain uninterrupted supply of ethanol.

Mr. Aiyer said prices of ethanol shot up as the alcohol industry had the first call on the limited molasses available due to poor sugarcane crop. "We want to extend the ethanol programme to all over the country but availability is a constraint," he said.

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