OVERVIEW

 Introduction of NELP
 Main Features of NELP
 Pre – NELP conditions
 Rounds of NELP
 Comparison
 Future Vision
 Conclusion
INTRODUCTION
 NELP provides a level playing field in which all the
parties may compete on equal terms for the award of
exploration acreage.
 GOI announced NELP in 1997-98 budget.
 It took 2 fiscal years and 2 successive government to
finalize.
 The tax incentive promised to prospective investors.
 After several go and halt signs by GOI, NELP finally got
Underway in 1999.
MAIN FEATURES OF NELP
 Fiscal stability provision in the PSC (Production
Sharing Contract ).
 No signature, discovery or production bonus.
 No customs duty on imports.
 No mandatory state participation.
 No carried interest by National Oil Companies (NOC).
 Freedom to the contractor for marketing of oil & gas
in the domestic market.
MAIN FEATURES OF NELP
 No cess on crude oil production.
 Royalty to be paid on crude oil & natural gas on
Volume basis.
 Income tax holiday for 7yrs from start of
commercial production.
OBJECTIVES OF NELP ROUNDS
 Intensive exploration of Indian basins.
 Opening up of acreages in ultra deep water &
frontier areas.
 To stimulate & promote interest and activity from
a wide range of E & P players.
 To bring-in new & state of art technology in
exploration & exploitation.
 Level playing field to all participating companies.
 Transparent Bid Evaluation system .
CHANGING SCENARIO
1 Company
1945 1 Producing Basin

1990 2 Companies
3 Producing Basins
12 Companies
2000
7 Producing Basins

24 Companies
2007
10 Producing Basins

7
NELP SCENARIO
 1945 : Burma Oil Company in Assam Shelf area

 1990 : ONGC & OIL

Basins : Assam Shelf , Cambay and Bombay High

 2000 : ONGC, OIL, Cairn

Energy, GSPC, Essar, HOEC, Moscbacher, Okland, Poenix, Hardy, Canoro, Premier Oil,
Basins : Assam Shelf, Cambay, Bombay High, Cauvery, KG, Assam Arakan Fold bed, Jaiselmer

 2007 : ONGC, OIL, Cairn

Energy, GSPC, Essar, HOEC, Moscbacher, Okland, Poenix, Hardy, Canoro, Premier Oil, RIL, Enpro-
Finance, Gazprom, Jubiliant Oil & Gas, Geo Petrol, ENI, Niko, Focus, Santos, Petrogas, Naftogaz, Prize
Petroleum,

 Basins : Assam Shelf, Cambay, Bombay High, Cauvery, KG, Assam Arakan Fold
bed, Jaiselmer, Barmer Sanchor, KG Deep Water, NEC
PRE INDEPENDENCE 1866-1947
 Oil exploration in India commenced in 1866 when Mr.
Goodenough of McKillop Stewart company drilled a
well near Jaypore near upper Assam.

 First commercial oil discovery in 1889 at Digboi.

 1893 rights were granted to Assam oil syndicated to

erect a refinery and led to formation of Assam Oil
Company (AOC)in 1899.
1947-1960
 After independence GOI realized the importance of Oil
& Gas and framed Industrial Policy Statement of 1948.

 Top priority for development of Petroleum Companies.

 Indo-Stanvac Project a JV between GOI and Standard

Vaccum Oil Company of US in 1953 gave the first oil
discovery of independent India near Nahorkatiya.
1947-1960
 In 1955 GOI established ONGD (Oil and Natural Gas
Directorate) with the help of GSI (Geological Survey of
India).
 From 1958 ONGC started its exploration in:
1. Himalayan Foothills – Ganga Plains
2. Alluvial tracks of Gujarat
3. Upper Assam and West Bengal
4. Cambay Basin
1961-1991
 1962 experimental seismic surveys were carried
out in Gulf of Cambay.
 Also western offshore survey details resulted in
Bombay offshore India’s biggest commercial
discovery.
 In 1990 commercial oil discoveries by OIL in
Rajasthan.
 And Assam in 1991.
HISTORY OF PRE-NELP ROUNDS
 Exploration bidding rounds started in 1979
 The initial rounds were not successful.

 1st four rounds – 12 years (1979-1991)

 Next five rounds in 2 years (1994-1995)

ROUNDS OF EXPLORATION
 1st Round of Exploration – 1980 – 32 Offshore blocks
 2nd Round of Exploration – 1982 – 50 Onshore and
Offshore blocks
 3rd Round of Exploration – 1986 – 27 Offshore
 4th Round of Exploration – 1991 – 72 Blocks (39
Offshore & 32 were Onland)
 5th & 6th Round of Exploration - 1993 – 45 Blocks
 7th & 8th Round of Exploration – 1994 – 45 Blocks
POST INDEPENDENCE & PRE NELP ERA
 Discovery of Naharkotiya in NE in 1953
 Ankleshwar in Cambay Basin in 1958
 Mumbai High in Mumbai Basin in 1972
 Cauvery in 1958 (Karaikal-1)
 Jaiselmer sub-basin in 1958 (Manhertibba-
1)
 Assam-Arakan yoma fold belt in 1973
(Baramura-1)
 Krishna-Godavari in 1982 (Narsapur-1)
PRE NELP
Number
Number
Blocks offered 379
400
300
Bids received 148 200
Number
100
0
Contract signed 28 Blocks offered Bids received Contract
signed

•Pvt. Companies felt that the incentive structure designs were not attractive for the higher
perceived risk

•Inordinate delays in awarding contracts (up to 2-3 yrs)

•After signing contracts, it took years to obtain clearances from various agencies of the GOI &
State Govt. to go ahead to start the operations
NELP I– JANUARY 8, 1999
Number Number
Blocks offered 48
50
40
30
Bids received 45 20 Number
10
Contract signed 24 0
Blocks offered Bids received Contract
signed

World class gas discovery by RIL-NIKO in 2002 in KG off shore

block
 Cairn energy’s discovery in KG deep water block
 Gas discovery by RIL in Mahanadi shallow water block
NELP II – 2000
Number Number
Blocks offered 25
50
40
30
Bids received 44 20 Number
10
0
Contract signed 23 Blocks offered Bids received Contract
signed

3 Discoveries were made in Cambay Basin GSPC discovered OIL &

NIKO discovered natural gas
NELP III – 2001
Number
Number
Blocks offered 27
60
40
Bids received 52 20 Number

0
Contract signed 23 Blocks offered Bids received Contract
signed

GSPC - jubilant - GGR consortium made world class gas discovery in KG

( KG-OSN-2001/3) offshore block in June, 2005
NELP IV – 2003
Number Number
Blocks offered 24
50
40
30
20 Number
Bids received 44 10
0
Blocks offered Bids received Contract
Contract signed 20 signed

 Provision of fast track arbitration

 Higher weightage for technical and financial viability of deep water
block
 Surcharge on foreign companies abolished
 Bank guarantee to be returned after completion of MWP
NELP V – 2005
Number Number
Blocks offered 20
80
60
Bids received 69 40
Number
20
Contract signed 20 0
Blocks offered Bids received Contract
signed

Workstations were provided in data centers in London, Houston, Calgary & Dubai to facilitate companies
to review and analyze data.
 Govt. decided to take its profit share of natural gas in cash or kind for a block of 5yrs instead of such
option being made every year.
 Co.’s with net worth US $500million or more not required to give bank guarantee towards MWP
commitment as against the threshold limit of US $ 1 billion earlier.
NELP VI – 2006
Number Number
Blocks offered 55 200
150
Bids received 165 100
Number
50
Contract signed 19 0
Blocks offered Bids received Contract
signed

Check on aggressive/speculative bidding

• Uniform seismic coverage of basins
• Participation of E&P companies with global experience
– Induction of new technology
– Global knowledge
– Better geological models
– Better E&P practices
• Better Government take
NELP VII
 Approximately 50 to 60 blocks have been identified for
the offering.

 Rajasthan Basin, Cambay Basin, Himalayan Foreland &

Punjab Basin, Ganga Basin, Kutch Basin, Saurasthra
Basin, Vindhyan Basin, Mumbai Offshore Basin, Kerala-
Konkan Basin, Purnea Basin, Bengal Basin. Mahanadi
Basin, Krishna – Godavari Basin, South Rewa
Basin, Palar Basin, Assam – Arakan Basin, Deccan
Syneclise, Cuddapah Basin, Andaman Basin.
Expected Blocks

Onland : 40-45
Shallow Water : 13-15
Deep Water : 20-25
Total : 73-85
NELP ROUNDS OVERVIEW

Blocks Bids Contracts

offered received signed
Pre - NELP 379 148 28
NELP I 48 45 24
NELP II 25 44 23
NELP III 27 52 23
NELP IV 24 44 20
NELP V 20 69 20
NELP VI 55 165 19
NELP – A SUCCESS STORY
60
55
52

50 48
Blocks Offered
Blocks Awarded
40

30 27
25
24 23 23 24
20 20 20
20

10

0
NELP-I NELP-II NELP-III NELP-IV NELP-V NELP-VI
(1999) (2000) (2002) (2003) (2005) (2006)

% of success increased with every NELP round NELP V had 100% success at
this point after receiving 100% we decided to increase the blocks on offer and
met with 95% success straightaway in NELP VI
COMPARISON
COMPARISION
Pre-NELP NELP-I, II & III, IV,V
(1993 –2006)–13 Yrs. (2000-06)-6 Yrs.

2D Seismic Survey (LKM) 24,091 1,09,305

3D Seismic Survey (SKM) 5,304 67,773

Exploratory Wells (No.) 167 93

PSC Blocks 28 138

No. of Discoveries 25 40
(Up to 15-04-2007)
Investment made on Exploration 781.65 1451.18
(US$ Million)
FUTURE OF NELP

 Out of 90 blocks under exploration only a few of the

blocks are explored through drilling
 Hydrocarbon potential of many blocks yet to be
assessed by drilling
 Last Seven years of NELP opened up new areas for
hydrocarbon occurrence
 Confidence build-up in discovering more & more oil
and gas in new areas
 Very high chances of discovering much more
hydrocarbons in country
CONCLUSION

 NELP is a success.
 India is highly under /unexplored
 Possibility of striking of rich oil and gas reserves in
poorly explored /unexplored older sediments quite
high.
 Need for acquiring geo-scientific data across the country
 Integration of entire geo-scientific data for better
geological understanding of regional & local
prospectivity.
SOURCES
 Directorate General of Hydrocarbons
 Paper on E&P Licensing Policy –
PETROFED , Price Water House Coopers
(Knowledge Partners)
 MoPNG