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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. Thetax incentive promised to prospective investors. After several go and halt signs by GOI, NELP finally got Underway in1999.
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. No cess on crude oil production. Royalty to be paid on crude oil&natural gason Volume basis. Income tax holiday for 7yrs from start of commercial production.
Maximum Government Take Fiscal Flexibility State Participation Domestic Market Obligation
Exploration Activity
Crude
Economic Performance
Achievements of NELP:
Production sharing contracts (PSCs) for 203 blocks have already been signed with NOCs, Indian private and foreign companies up to conclusion of seventh round of NELP and another 33 PSCs were signed on June 30, 2010 for eighth round of NELP blocks. More than 50% Blocks are with ONGC and the remaining are with Indian and foreign companies. 46% of Indian sedimentary area was awarded through international competitive bidding in a transparent manner up to seventh round of NELP. In addition, about 1.8% of total sedimentary area is awarded in the eighth round of NELP. (The total Indian sedimentary basinal area is 3.14 Million sq-km). 81 hydrocarbon discoveries in 23 blocks in onland and offshore areas comprising of 55 of gas, 19 of oil and 7 of oil & gas discoveries.
Cont
378 million metric tonne of oil and oil equivalent of gas reserves (347.6 by RIL, 30 by GSPC and 0.49 by NIKO) has been established under NELP. 3 blocks are on production, one deepwater block, KG-DWN98/3(KG-D6) in Krishna Godavari basin and another 2 onland blocks in Cambay basin in Gujarat. First deepwater gas production commenced in April 2009, which is currently at the rate of about 62 million metric standard cubic metre per day (MMSCMD). Crude oil production from this block is about 27,600 barrels per day. Production in another 2 blocks in Gujarat is about 700 barrels per day of crude oil in CB-ONN-2000/1 operated by GSPC and 0.2 MMSCMD of gas operated by Niko Resources Limited. Committed investment of $11.13 billion is on exploration under NELP. Actual expenditure on exploration is $6.91 billion and $6.9 billion on development as on 1.1.2010. Thus, total investment of $13.81 billion is under NELP.