Reliance bids for six, Cairn for two blocks in NELP-IX

Reliance bid for two deepsea blocks in the Andaman Basin in the Bay of Bengal and four onshore blocks in Rajasthan and the Cambay Basin, a source in the upstream oil regulator, the DGH, said here.

Cairn India, whose success in Rajasthan may have propelled Reliance to bid for two blocks in the state, has submitted offers for only two blocks -- one onland and one offshore. Cairn has not bid for any two exploration blocks on offer in Rajasthan.
Bids for the 34 oil and gas blocks, which include eight in deepwater areas, seven in shallow water and 19 onshore properties, close today.

Reliance, which had not bid for any block in the previous NELP-VIII round in 2009, has shown interest in onland blocks in Rajasthan, apparently swayed by the huge oil finds by Cairn India.

The Mangala oilfield in Cairn India's prolific RJ-ON-90/1 block in the Thar desert of Rajasthan is currently producing 125,000 barrels per day and the entire area, where Cairn has made number of oil discoveries, has the potential to produce up to 300,000 bpd (15 million tonnes a year).

India had got an investment commitment of USD 1.1 billion in NELP-VIII and it is expecting to better that.

Industry sources said Cairn, which is known to have a knack for making discoveries in areas often abandoned by energy giants, has little interest in NELP-IX as many of the blocks on offer are old and recycled (areas where some or the other company had previously done exploration but had abandoned them as they did not find any or very little hydrocarbons).

Out of 34 blocks, 19 blocks are totally new areas -- 7 in deep sea, 2 in shallow water and 10 onland blocks. The remaining 15 (1 in deep water, 5 in shallow water and 9 onland blocks) are recycled blocks.

Of the recycled blocks, five are discards of state-owned Oil and Natural Gas Corp (ONGC), the largest bidder in the previous eight rounds of NELP. ONGC relinquished the areas it had won in first and second round of NELP, after it made no discovery.

In the eight rounds of NELP since 1999, 235 blocks have been awarded till date. This has resulted in enhancement of exploration coverage from 11 per cent to about 58 per cent of the Indian sedimentary basin between 2000 and 2010. The discoveries made under NELP have resulted in in-place hydrocarbon reserves accretion of a staggering 642 million tonnes of oil and oil equivalent gas, the DGH source said.

A total of 87 oil and gas discoveries have been made in 26 blocks under NELP during this period. The discoveries have added over 640 million tonnes of oil equivalent reserves.
In the first eight rounds of NELP, a USD 11.1 billion investment was committed, but the actual investment so far has been USD 14.3 billion.

The blocks offered in NELP-IX include eight deep-sea, seven shallow water and 19 onland. The onland blocks include eight small blocks, for which the technical expertise of companies is not a criteria for submission of submit bids.

These 34 blocks cover a sedimentary area of about 88,807 square kilometres, which is 2.9 per cent of the Indian sedimentary basin area.

The onland blocks fall in Assam (2), Gujarat (11), Rajasthan (2), Madhya Pradesh (2), Tripura (1) and Uttar Pradesh (1). The seven shallow water and eight deep water blocks are off the East and West Coast, but no area in the prolific Krishna-Godavari basin is on offer.

Out of 87 oil and gas discoveries made in the NELP rounds, natural gas production in Reliance Industries eastern offshore KG-D6 block commenced from April, 2009.

The 8th round, which closed on October 12, 2009, attracted an investment commitment of USD 1.34 billion for 36 blocks that received offers. Under NELP-VIII, 70 areas or blocks for exploration were offered, the biggest licensing round in India.

Of the 36 areas bid for, the government had awarded 33 blocks to successful bidders.
The government has hired UK-based Fugro Data Solutions Ltd to market the blocks in NELP-IX.