New Exploration Licensing Policy (NELP) formed by Govt. of India

1. What Is NELP?
The New Exploration Licensing Policy (NELP) were formulated
by the Government of India, during 1997-98 to provide a level
playing field to both the Public and Private sector companies in
exploration and production of hydrocarbons with Directorate
General of Hydrocarbons as a nodal agency for its
implementation.

2. Salient features
 100% FDI is allowed under NELP
 No mandatory state participation through ONGC/OIL or any carried
interest of the Government.
 Blocks are awarded through open international competitive bidding.
 ONGC and OIL can compete for obtaining the petroleum exploration
licenses on a competitive basis instead of the existing system of granting
them PELs on nomination basis.
 ONGC and OIL will get the same fiscal and contract terms as private
companies.
 Freedom to the contractors for marketing of crude oil and gas in the
domestic market.
 Royalty at the rate of 12.5% for the onland areas and 10% for offshore
areas.
 Royalty to be charged at half the prevailing rate for deep water areas
beyond 400 m bathymetry for the first 7 years after commencement of
commercial production.
 Cess to be exempted for production from blocks offered under NELP

3. Objectives of NELP
To step up the level of investment in exploration in India to
hasten the pace of reserve accretion
To provide a level playing field to Private, Foreign and National
Oil Companies
To liberalize and open up the Exploration and Production sector
for Private and Foreign investments, by allowing upto 100%
FDI

4. PRE-NELP
Petroleum exploration and production activities were initially
carried out in India by two national oil companies (blocks were
offered on nomination basis):
1.Oil and Natural Gas Corporation Limited (ONGC)
2.Oil India Limited (OIL)
With the liberalization of economy in 1991, the Indian sedimentary
basins were opened to private sector companies also.
From 1991 to 1993, three bidding rounds of small and marginal
fields discovered by ONGC and OIL were offered to other
companies.
From 1993 to 1995 (Pre-NELP), six rounds of bidding were
conducted to attract private investment in exploration and
development with NOCs as licensee.

5. NELP Current Status
A total of 360 exploration blocks were offered under nine rounds of
NELP bidding held so far, of which PSCs have been signed for 254
blocks by various Companies (Central/State Public Sector
Undertakings: 144 blocks; Private Companies: 70 blocks; and Foreign
Companies: 40 blocks, as operators).
118 discoveries (45 oil and 73 gas) in 39 NELP blocks.
In-Place oil volume=39.76 Million Metric Tonnes (MMT)
Gas volume=705.36 Billion Cubic Meters (BCM).
Production has started in 6 discoveries in 3 blocks.
NELP X has 46 blocks on offer.

6. Blocks Summary for NELP Rounds
NELP
Round
Launch
Year
Blocks
Offered
PSC
Signed
Relinquished Operational
Pre NELP 1993 28 14
NELP-I 1999 48 24 17 7
NELP-II 2000 25 23 18 5
NELP-III 2002 27 23 9 14
NELP-IV 2003 24 20 3 17
NELP-V 2005 20 20 6 14
NELP-VI 2006 55 52 52
NELP-VII 2007 57 41 41
NELP-VIII 2009 70 32 32
NELP-IX 2010 34 19 19
Total 360 282 53 215

7. NELP IX
The Government of India launched Ninth bid round of NELP on 15
October, 2010.
34 blocks covering an area of about 88,807 Sq.km were offered under
NELP-IX. The offered blocks included 8 deep water blocks, 7 shallow
water blocks and 19 on land blocks.
A total of 74 bids were received for 33 blocks out of 34 blocks (8 deep
water blocks, 6 shallow water blocks and 19 onland blocks).
Production Sharing Contracts (PSC) for 18 blocks has been signed till
date.

8. NELP X
The activities related to the offering of exploration blocks under tenth
bidding round of NELP have been initiated.
A total of 46 blocks (17 Onland, 15 shallow water and 14 deep water
blocks) have been identified and to be offered under NELP-X in 13
prospective sedimentary basins of India, for exploration of oil and
natural gas, covering an area of 1,66,053 sq.km.
The Ministry of Petroleum & Natural Gas has secured inter-ministerial
clearances for 46 blocks to be offered under NELP-X.

9. Production from NELP
Commercial oil or gas production has commenced from 6
oil/gas discoveries made in the following 3 NELP blocks:
1.CB-ONN-2000/2 (NIKO -100%)
2.CB-ONN-2000/1 (Gujarat State Petroleum Corporation
Limited -50%; Gail (India) Limited -50%)
3.KG-DWN-98/3 (Reliance Industries Limited -90%, NIKO -
10%)

10. THANK YOU