Govt approves award of 16 oil and gas blocks in NELP-IX

 The government had offered 34 areas for exploration and production of oil and gas in the 9th round of bidding under NELP and bids for received for 33 had been received at the close of bidding on 28th March last year

New Delhi: The government Friday approved the award of less than half of the 33 oil and gas blocks that were bid for in the ninth round of New Exploration Licensing Policy (NELP), reports PTI.

The Cabinet Committee on Economic Affairs (CCEA) approved award of 16 blocks, oil minister S Jaipal Reddy told PTI here.

“Bids 16 blocks were recommended for acceptance by the Empowered Committee of Secretaries, the same has been approved by CCEA,” he said.

The government had offered 34 areas for exploration and production of oil and gas in the 9th round of bidding under NELP and bids for received for 33 had been received at the close of bidding on 28th March last year.

In the previous eight rounds of NELP, 235 blocks have been awarded so far.

The 34 exploration blocks offered in NELP-IX included eight deepwater blocks, seven shallow water blocks, 11 on-land blocks, and 8 Type-S (or small) on-land blocks, he said.

Sources said some blocks in Mahanadi basin off the Orissa coast in east India had to be withdrawn as they fell in Naval firing/exercise areas while bids for several others had to be rejected due to various reasons.

The CCEA approved award of two shallow water and two onland blocks to consortia led by ONGC (Oil and Natural Gas Corporation). State-owned OIL led consortia got two onland blocks in the Assam-Arakan basin. Deep Energy walked away with two Cambay basin blocks while Focus Energy beat Reliance Industries to bag an area in north-west Indian Rajasthan state.

The five blocks awarded to companies like Sankalp Oil and Natural Resources, Pratibha Oil and Natural Gas Pvt Ltd and Pan India Consultants.

Sources said the ECS had recommended rejection of single bids for eight blocks where profit petroleum offered to the government ranged between 6.6% and 6.7%.

ECS suggested rejecting bids by Reliance Industries and state-owned ONGC for the Andaman sea block as they had offered “very low” profit share to the government.

It also wanted the bid by a consortium of ONGC-OIL and GAIL for deepsea block GS-DWN-2010/1 and that of ONGC-OIL-BPRL for Kerala-Konkan deepwater block KK-DWN-2010/1 also rejected as they offered very low profit share.

 

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No decontrol of diesel; petroleum prices need a relook: Oil minister

 Oil companies are currently losing Rs14.73 a litre on diesel, Rs30.10 a litre on kerosene and Rs439.50 per 14.2-kg domestic LPG cylinder. For the full fiscal, they are projected to lose about Rs1,40,000 crore in revenue on selling the three products at government controlled rates

New Delhi: Oil minister S Jaipal Reddy Friday underlined the need for having a relook at petroleum product prices, but said the government is not contemplating decontrol of diesel rates just yet.

“The prices of all petroleum products need to be looked at again. However, we live in a real world, not only in numbers,” he told reporters on the sidelines of 7th Asia Gas Partnership Summit here.

Oil firms sell diesel, domestic LPG and kerosene at government-controlled rates which are way below the cost. Even petrol, which was deregulated in June 2010, continues to be sold at around Rs7.70 per litre less than its actual cost. [1 dollar = 51.21 rupees] 

“As of now, we are not contemplating deregulation of diesel prices,” Mr Reddy said.

State-owned oil companies will need to raise diesel price by Rs14.73 a litre if the government were to free its pricing, like it was done in case of petrol in 2010.

“There is some kind of discontinuation of deregulation in petrol prices," he said. "But we have no intention of bringing regulation back.” 

Oil companies have demanded that since they have not been able to raise petrol price in line with increase in cost, they be compensated by the government for the Rs4,500-crore loss they incurred on fuel sale. At present, the government compensates oil firms for losses only on diesel, domestic Liquefied petroleum gas and kerosene.

“Oil companies have no doubt suggested some measures. But the petroleum ministry does not have independent (decision making powers on it). I will take up the issue at Empowered Group of Ministers at the appropriate time,” Mr Reddy said.

The EGoM, headed by finance minister Pranab Mukherjee, is empowered to decide on pricing of three subsidised products.

The EGoM in June 2010 which deregulated petrol and if petrol is to be brought back under regulation, the same ministerial panel will have to take a call.

“I have to go to the meeting of EGoM (to decide on prices of petroleum products),” Mr Reddy said.

Before petrol price is regulated, the ministry will have to hold consultations with all, he said.

“From perspective of our ministry, all petroleum products (on which oil companies lose money on selling at a price lower than cost) need to be compensated by the government,” he said.

Oil companies are currently losing Rs14.73 a litre on diesel, Rs30.10 a litre on kerosene and Rs439.50 per 14.2-kg domestic LPG cylinder.

For the full fiscal, oil companies are projected to lose about Rs1,40,000 crore in revenue on selling the three products at government controlled rates.

The government has so far provided only Rs45,000 crore in cash subsidy to oil companies.

 

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Cheques, drafts to be valid for 3 months from April

The RBI has directed that with effect from 1 April 2012, banks should not make payments against cheques, drafts, pay orders or banker’s cheques if they are presented after the period of three months from date of issue

New Delhi: Come 1st April and cheques and bank drafts will be valid only for three months, a development that the Reserve Bank of India (RBI) thinks will help mitigate frauds related to such instruments, reports PTI.

The RBI has directed that with effect from 1 April 2012, banks should not make payments against cheques, drafts, pay orders or banker’s cheques if they are presented after the period of three months from date of issue.

It has been brought to its notice by the government that some persons were taking undue advantage of the six month validity of cheques, drafts, pay orders, banker’s cheques by circulating them like cash for this period, the RBI had said in a notification earlier.

According to a senior banker, the three-month validity period is a good enough time for instrument conciliation.

It was reported to the Central Economic Intelligence Bureau that some persons are taking undue advantage of the practice of banks of making payment of cheques or draft presented within a period of six months from the date of the instrument as these instruments are being circulated in the market like cash for six months.

“RBI is satisfied that in public interest and in the interest of the banking policy, it is necessary to reduce the period within which cheques/drafts/pay orders/banker’s cheques are presented for payment from six months to three months from the date of such instrument,” it had said.

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