Govt may award blocks under NELP IX by next March

The government had offered 34 blocks in NELP-IX last year. Oil minister S Jaipal Reddy had at the close of bidding on 28 March 2011, stated that the blocks would be awarded and contracts signed with winners in four months. The blocks are expected to be offered by next March, eight months behind schedule

New Delhi: The government is likely to award oil and gas blocks offered for bidding in 9th round of New Exploration Licensing Policy (NELP) by March next year, a good eight month behind schedule, reports PTI.

“Some blocks (offered in NELP-IX) were held up due to security issues. By March next year, most of the blocks will be awarded,” Sudhir Bhargava, additional secretary, ministry of petroleum and natural gas said here today.

The government had offered 34 blocks in NELP-IX last year. Oil minister S Jaipal Reddy had at the close of bidding on 28 March 2011, stated that the blocks would be awarded and contracts signed with winners in four months.

“We were looking at (signing PSCs) by December,” Mr Bhargava said pointing to defence ministry raising objections to offer of some blocks that fall in Naval exercise areas.

The government had in the previous eight rounds awarded 235 areas for exploration and production of oil and gas.

While Mr Bhargava did not say how many of the 33 blocks that were bid for in NELP-IX would be awarded, officials in his ministry stated that a high-level panel of secretaries has recommended awarding of only 14 areas.

Empowered Committee of Secretaries (ECS) recommended award of only 14 areas after three areas in Mahanadi basin off the Orissa coast had to be withdrawn as they fell in Naval firing/exercise areas and bids for several others had to be rejected due to various reasons.

The panel recommended award of two shallow water and two onland blocks to consortia led by ONGC. State-owned OIL-led consortia was adjudged winner for 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 Rajasthan.

The remaining five blocks were recommended for award to companies like Sankalp Oil and Natural Resources, Pratibha Oil and Natural Gas Pvt Ltd and Pan India Consultants.

The government had offered eight deep-sea blocks, seven shallow-water areas and 19 onland blocks for bidding in NELP-IX. One shallow water block did not receive any bid.

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

It sought assessment of net worth of top bidder for three blocks in Cambay and Rajasthan before awarding them.

ECS suggested rejecting bids by RIL and state-owned Oil and Natural Gas Corporation (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 deep-sea 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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Govt presses pause button on FDI to buy peace in Parliament

Sources in both the BJP and the Left parties insisted that since there are differences within the Union Cabinet as well as in Congress on the FDI issue, such informal communication may not be the last word

New Delhi: In a bid to buy peace in Parliament, the government Monday said a final decision on the foreign direct investment (FDI) issue will be taken only after consulting stakeholders and the opposition which insisted on a complete rollback and not just holdback, reports PTI.

With the government in a bind and Parliament paralysed for nearly two weeks, finance minister Pranab Mukherjee Monday spoke to leader of opposition in Lok Sabha Sushma Swaraj and CPI (M) leader Sitaram Yechury and informed them that the government is willing to hold back the decision to allow 51% FDI in multi-brand retail.

Both Ms Swaraj and Mr Yechury suggested that government convene an all-party meeting to convey its decision and then inform Parliament.

“I told Pranab that he should pick up the threads where they were left the last time. Since he had promised to get back to the opposition in the last all-party meeting, a similar meeting should be convened on 7th December in the morning where the government can clarify its stand,” Ms Swaraj told PTI.

The BJP has made it clear that it wanted a complete rollback of the government’s decision on FDI. “BJP has clearly stated in the all-party meeting that it wants a rollback. Let the government come out with a formal response,” party spokesperson Ravi Shankar Prasad told reporters.

“We continue to stick to our demand of unconditional reversal of the decision on FDI.

Mr Mukherjee told us that the government has decided to put the decision of FDI in suspension and wanted the Parliament session to continue,” Mr Yechury later said.

However, this did not convince Ms Swaraj and Mr Yechury and both insisted that an all-party meeting be called where the government can formally convey its view.

“On that basis, a decision can be taken,” Mr Yechury said.

Sources in both the BJP and the Left parties insisted that since there are differences within the Union Cabinet as well as in Congress on the FDI issue, such informal communication may not be the last word.

UPA allies TMC and DMK have openly opposed the decision while NCP has suggested that the government should go by the sense of the House on this matter.

Asked whether Mr Mukherjee had told her about roll-back of the decision or merely about holding it back, Ms Swaraj said he had not discussed the issue in detail and insisted on making the stand clear on the floor of the House.

She later called up parliamentary affairs minister Pawan Kumar Bansal and told him about the conversation with Mr Mukherjee and emphasised that an all-party meeting be held.

The government’s move to press the pause button on FDI was made public first by Trinamool Congress chief Mamata Banerjee after a telephonic conversation in Kolkata with Mr Mukherjee on Saturday.

Asked what would be the BJP response if the government only offers to defer the decision on the pretext of making changes in the policy, Ms Swaraj said her party was firm on its stand on roll-back of FDI in multi-brand retail but would see what the UPA states on Wednesday before taking a decision.

Mr Yechury said government has to roll-back this decision.

“Whatever proposal the government has it should keep it before the all-party meeting. On its basis, we will take a decision,” he said.

In reply to another question, Ms Swaraj said even if the FDI deadlock is resolved, BJP will press for acceptance of its adjournment motion on black money and a debate on price rise (moved by the Left parties) under Rule 193 (which does not entail voting).

Both the Left parties and the BJP also sought to blame the government for the deadlock.

“I told Mr Mukherjee that we always want Parliament to function. The question is will the government allow the Parliament to function. It should correct the decision it has made,” Mr Yechury said.

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Cairn-Vedanta deal gets home ministry approval

The security clearance was one of the conditions that the government had set for Vedanta group buying 40% stake in Cairn India from UK’s Cairn Energy. The two entities have already agreed to the other condition of Cairn India paying cess and royalty on crude oil produced from its mainstay Rajasthan oilfields

New Delhi: The home ministry has given its approval to London-listed miner Vedanta Resources’ buying majority stake in Cairn India for $8.7 billion, reports PTI.

The home ministry, while giving the security no-objection certificate (NOC), highlighted eight areas of concern, including 64 legal proceedings against Vedanta and its subsidiaries in various courts, sources privy to the development said.

The security clearance was one of the conditions that the government had set for Vedanta group buying 40% stake in Cairn India from UK’s Cairn Energy Plc.

Cairn Energy and Vedanta have already agreed to the other condition of Cairn India paying cess and royalty on crude oil produced from its mainstay Rajasthan oilfields.

Cairn India does not pay royalty and cess on its 70% share in the Rajasthan block as per the contract, but its current majority owner, Cairn Energy, and new owner Vedanta forced it to accept the government condition of making royalty cost recoverable and paying Rs2,500 per tonne cess.

Also, the government had a conditioned approval to the deal on Oil and Natural Gas Corporation (ONGC), which has 30% stake in Rajasthan block and pays royalty on behalf of Cairn India, giving its NOC. ONGC has agreed to give the NOC if Cairn India accepts to make royalty cost recoverable and pay cess.

Sources said the ministry’s 25th November letter to the oil ministry pointed to Vedanta Group’s investment in cases of “default of payment, human rights violations, environmental damage in its mining and metal projects etc in India and abroad.”

But these concerns did not have a “direct bearing on the security NOC”, it said.

The cases highlighted include alleged customs duty evasion by Sesa Goa in iron ore export, case filed by the Directorate of Revenue Intelligence (DRI) against Hindustan Zinc for which investigation was still in progress and environment ministry’s rejection of its earlier clearance to Sterlite Industries for mining bauxite from Niyamgiri hills.

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