New Delhi: India plans to offer 86 hydrocarbon blocks under the 10th round of the New Exploration Licensing Policy (Nelp) and focus on obtaining the various clearances needed for operating these blocks to avoid any embarrassment after the blocks are awarded.

The petroleum ministry aims to start the process for seeking the cabinet’s approval for the Nelp round by November and begin the road shows by January.

The government will rigorously follow the clearance processes involving various ministries, including the environment and forest, defence and space ministries, given that 73 blocks awarded in earlier rounds had encountered problems related to clearances.

This number was brought down to 10 after India set up the cabinet committee on investment to help expedite clearances from ministries such as defence.

“The Directorate General of Hydrocarbons has started work on getting clearances for 86 blocks. The process is going to be very rigorous so that we are able to avoid the problems as encountered later," said a senior government official involved in the process, requesting anonymity. “The foreign investors want more clarity with the full freedom to operate once the blocks have been awarded."

Nelp was approved by the government in 1997—it kicked off in January 1999—in an effort to boost hydrocarbon exploration in the country. Under Nelp, the government allocates rights to explore hydrocarbon blocks through a bidding process and has done this in nine phases so far for 249 blocks.

India, the world’s fourth largest energy-consuming nation, imports 80% of its crude oil and 25% of its natural gas requirements. It trails the US, China and Russia, accounting for 4.4% of the global energy consumption.

India’s energy demand is expected to more than double by 2035, from less than 700 million tonnes of oil equivalent (mtoe) now to around 1,500 mtoe, according to the oil ministry’s estimates.

“My interest in the next rounds will be about interest in some basins such as the Gangetic one, which hitherto has been unexplored but turns out to be promising," said Anil Razdan, a former additional and special secretary in the petroleum ministry.

The ninth round of auctions of hydrocarbon exploration blocks turned out to be a low-key affair; while one block failed to elicit a bid in March last year, 33 blocks got 74 bids, mostly from state-owned companies such as Oil and Natural Gas Corp. Ltd. Also, only 13 of the 33 blocks on offer were formally awarded in March this year, though they had actually won the bids a year ago—the delay was on account of the inability to get clearances.

“I will be pleasantly surprised if there is unusual investor interest at this point of time," Razdan added.

In an interview in June, petroleum minister M. Veerappa Moily said: “Nelp rounds have not created any certainty. Actually, it created more ambiguity because we had promised market price, which we couldn’t give."

A market price was promised under Nelp and the production-sharing contract.

In a separate development, the petroleum ministry has moved a note for the cabinet committee on investment’s consideration for granting approvals from the department of space for Italy’s Eni SpA’s AN-DWN-2003/2 block in the Andaman and Nicobar Islands area and Cairn India Ltd’s PR-OSN-2004/1 block in the Palar-Pennar Basin.

“The note has been moved for CCI’s (cabinet committee on investment) consideration. It may come up in around three weeks for a decision," said the government official quoted above.

The petroleum ministry had earlier warned the Prime Minister’s office that the “non-clearance" of blocks awarded under Nelp “may lead to exodus of foreign firms who were brought with the assurance of a conducive investment environment".

Eni, which has a 40% stake in AN-DWN-2003/2 and is the operator of the block, couldn’t get permission from the department of space to drill in the exploration area due to the proximity of the block to the rocket-stage impact zone of the Indian Space Research Organisation.

Similarly, Cairn India, operator of the PR-OSN-2004/1 block with a 35% participating interest in it, couldn’t get permission from the department of space for drilling in the area.