Looking for an image makeover, India proposes to offer its tenth round of auctions for oil and gas blocks under a more flexible policy regime.
“Our experience till now (the past 20 years) in the New Exploration Licensing Policy has compelled us to think (about) why the sector has not attracted enough foreign direct investment (despite 100 per cent FDI). In NELP X, we will have a policy that will be more attractive for global investors,” Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum and Natural Gas, told BusinessLine .
Without elaborating on the changes in the regime, he said there would be discussions among producers, consumers and policymakers before the edition is launched.
India has one of the best production sharing contracts (PSCs) for its NELP, but has failed to attract the Chevrons and Exxons of the world. In the nine previous rounds, 254 blocks were awarded, resulting in an investment of over $20 billion.
Uncertainty in the fiscal regime, bureaucratic interference and tampering with the PSC were some of the reasons cited by industry for the current fate of the NELP.
“We are clear on two things: natural resources belong to the nation, and the first priority is to benefit the poor.
“But this does not mean we are anti-industry. We want to get global investors, therefore, we do realise the need for a progressive policy,” Pradhan said.
NELP X was launched this January, with the UPA regime proposing a Uniform Licensing Policy that would allow explorers to hunt for all kind of resources: oil, gas, coal-bed methane or shale.
But the auction got stuck due to the lack of a consensus on the kind of fiscal regime (revenue sharing model) it should offer contractors.