The decision comes after Australian mining major BHP Billiton said it would not improve the terms of its bid. BHP Billiton, the largest mining company in the world, and new entrant GVK Oil and Gas were the sole bidders for five deepwater blocks and hence the provisional winners after the bidding closed on June 30 this year.
The government on Monday received 181 bids from global and domestic oil majors, including ONGC, Reliance Industries, Essar, BP Plc and BHP Billiton, for oil and gas exploration blocks under the seventh round of NELP auction.
The last date for bidding is being pushed back from April 25 to May 9 to allow Finance Minister P Chidambaram to clear the air on the seven-year income tax holiday for oil and gas production, when he replies to Finance Bill in Parliament in next couple of week, officials said. "There is no formal decision yet, but this is the line of thinking and an announcement is likely soon," an official said.
The allotment is expected to attract investments of $1.5 billion, around 57 per cent less than the $3.5 billion commitment for the 52 blocks awarded under the previous auction. ONGC and its partners bagged the maximum number of 20 blocks in the seventh round, which closed on June 30. Australian mining major BHP Billiton and its partner GVK Power, bidding for the first time, won seven deepwater blocks.
The government may marginally increase petroleum prices, petroleum secretary M S Srinivasan on Tuesday said.
But after over $10 billion investment that yielded mostly natural gas discoveries, the finance ministry has ruled that the tax breaks would be available only to crude oil production and will not be extended to natural gas, sending the seventh NELP round in a tailspin, industry sources said. The petroleum ministry feels that withdrawal of tax holidays when substantial investment has been made in exploration activities is being viewed as the government reneging on its commitmen
Once the deal is inked, the two companies will also jointly bid for exploration blocks under the ninth round of auctions in Brazil.
Oil India chief reveals plans of the upcoming IPO and future investment strategies.
The block was offered to the consortium under New Exploration and Licensing Policy (Nelp VII). RIL has 70 per cent participating interest and BP, which is the operator of the block, holds the remaining 30 per cent.
The shortage of drilling rigs across the world is likely to delay the seventh round of auction of oil and gas blocks, under the New Exploration and Licensing Policy, till October-November this year.
In a bid to attract "big oil" to India, the government is close to finalising an Open Acreage Licensing Policy, which gives companies a round-the-year window to pitch for oil and gas in blocks of their choice.
Finance Minister P Chidambaram had, in the Budget for 2008-09, announced end to income tax holidays for refineries commissioning after April 1, 2009. The Budget also mentioned tax breaks under section 80-IB(9) would be available for production of 'mineral oil', which was defined as not to include petroleum and natural gas. This created a lot of confusion among investors and a fear of poor response took Petroleum Minister Murli Deora to Chidambaram earlier this week.
India expects to attract at least $4 billion of investment in oil and gas hunt in the seventh round of auction of acreage under New Exploration Licensing Policy (NELP) which was launched on Thursday.Petroleum Minister Murli Deora announced the offer of 57 oil and gas blocks - nine in shallow water, 19 in deep-sea and 29 onland, in NELP-VII, bids for which will close on April 11, 2008.
After awarding oil and gas blocks under NELP-VI, the government is now turning its focus to the seventh round of the New Exploration and Licensing Policy (NELP-VII).
The company is withdrawing from the blocks due to delays in clearances.
A joint venture of Adani Group and Welspun Enterprises Ltd has discovered natural gas reserves in an area off the Mumbai coast, the two firms said in a statement Monday. The first-ever gas discovery was made in the NELP-VII block MB-OSN-2005/2, Adani Welspun Exploration Ltd (AWEL) said. Spread across 714.6 square kilometers, the block is located in the prolific gas-prone Tapti-Daman sector of the Mumbai Offshore basin where production is already underway by other operators.
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