India may change exploration policy

Wednesday, 19 January 2005, 20:30 IST
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NEW DELHI:With a view to taking on board some global best practices and concerns of prospective overseas investors, India is considering changes in its exploration policies, including a new name for the guidelines framed eight years ago. "We have already made several changes in the New Exploration Licensing Policy (NELP) in the fifth round of blocks being offered like bringing down the criteria for bank guarantee for participating companies," said Petroleum Minister Mani Shankar Aiyar. Now companies with net worth up to $500 million are not required to furnish bank guarantee as against the earlier level of $1 billion. Change in the government's exercise of profit share in cash or kind from the exploration blocks to once in five years, instead of every year, are among Aiyar's new moves. A single window clearance facility at the petroleum ministry is another new step being introduced to woo big players and investments, said Aiyar. "We will see how these changes work to woo foreign investors. If successful we will continue with present policy, which has been in force for the last four rounds of NELP or go in for a revamp," Aiyar told IANS. "We are also planning to introduce more changes in the policy like provisions for very deep water exploration and introduction of open acreage," the minister said. Under open acreage of onshore or offshore blocks, a system followed in many countries, the exploration companies are allowed to design their own block outline for areas they would like to negotiate for exploration and development. Disclosing his intentions to introduce further changes in the NELP by next year, Aiyar said: "How can we call it a New Exploration Licensing Policy when it is an eight-year-old policy. This is just an idea. It is yet to be seen what changes need to be brought in the policy in keeping with the global best practices." The decision for change would depend on the response India receives to the 20 exploration blocks being offered for bid in the fifth round of NELP for which roadshows and one-to-one meetings with global energy majors would be held over the next few months. The bid offer for NELP-V would close on May 31; the award of contracts would be completed by July end.
Source: IANS