The eighth round of New Exploration Licensing Policy ended on October 12 attracting bids for 36 out of the 70 areas that had been offered.
Under the first six rounds of NELP, a total investment of $8.3 billion in exploration of oil and gas was committed, out of which about $4.5 billion has already been incurred on exploration and $1.4 billion on development of discoveries. A further $1.5 billion exploration spend is budgeted for NELP VII.
The first of the promotional roadshows for 70 blocks offered under the eighth edition of New Exploration Licensing Policy and 10 coal-bed methane areas will be held in Mumbai on August 8, a petroleum ministry official said. On April 9, India launched the eighth round of auction to give away blocks for exploration under NELP with August 10 being the last date for bidding. But it was deferred over ambiguity on tax holiday for natural gas.
Fearing investor backlash on ambiguity over tax holiday for natural gas, India on Friday deferred roadshows for the largest-ever auction of oil and gas blocks and the new dates would be worked out after elections.
With 4,00,000 sq km in acreage and over 100 blocks to be awarded, Nelp VIII is touted as India's biggest-ever auction of oil and gas blocks. Industry observers say there is a strong case for the government to postpone the Nelp VIII, keeping in account the present liquidity situation and low crude oil prices. "It will make sense to postpone Nelp VIII as a lot of exploration and production companies are re-looking at their investment strategies," said a sector expert.
The government is offering a total of 70 oil and gas blocks under NELP-VIII and 10 blocks have been offered under CBM-IV.
Minister of State for Petroleum and Natural Gas Jitin Prasada, who led the roadshows in the US and Canada, said the roadshows for 70 blocks offered in NELP-VIII and 10 coal bed methane blocks received overwhelming response from investors.
Irked by a media campaign that it would earn a windfall profit of Rs 50,000 crore (Rs 500 billion) from gas fields, RIL has said the charges were timed to sabotage the government's efforts to get investments in oil sector.
The higher MAT and confusion over whether its gas is eligible for a tax holiday have hurt the stock.
The government is planning to relaunch the eighth phase of bidding for oil and gas blocks under the New Exploration and Licensing Policy (Nelp-VIII) in the second week of August.
The company is withdrawing from the blocks due to delays in clearances.
Oil and gas players' wish list includes incentivising E&P investments and reintroduction of income tax holiday for exploration and production activities, among others.
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