Oil firms may need foreign buoys to take Nelp-VII

NEW DELHI: Domestic oilcos that would bid for blocks in the seventh round of new exploration licensing policy (Nelp-VII) may fail to qualify on their own in deepwater blocks.

The new norms for Nelp-VII are likely to make it mandatory for domestic oilcos to tie up and form a consortium with experienced foreign partners to qualify for blocks in deepwaters.

Joint ventures where the foreign partner has a minimum 10% stake would get a 10-point weightage (out of total 30 marks assigned for technical capability) while evaluating bids. Marks would be directly proportional to their experience in deepwater exploration.

Foreign partners must be an operator of any deepwater block producing oil or gas beyond 400 m bathymetry (ocean depth). The criterion is expected to be part of the technical capability parameter for Nelp-VII. Nelp-VII is scheduled to be announced in the first week of November.

It is proposed that a bidder would get marks in proportion to the production experience of its foreign partner. If one of the consortium partners is having production beyond 400 m bathymetry up to 1,000 m bathymetry, a 5-points would be allotted.

If the partner is having production beyond 1,000 m bathymetry, a full 10-points would be assigned. It is learnt that the proposed change has been approved by the empowered committee of secretaries and is being incorporated as a part of the bid evaluation criteria (BEC) for Nelp-VII.

Out of the total 30 points assigned to the technical capability, 4 points is kept for acreage holding (in more than 400 m bathymetry) of the consortium. Exploration & production (E&P) experience would get another 4 marks to the bidder.

Four marks is accorded to average annual accretion of proved reserves. Average annual production of hydrocarbon in the last five years for deepwater and shallow-water would fetch 4 marks each. Balance 10-points is assigned to the qualification of the JV partner.

The fiscal package, that is sharing of profit petroleum with the government, would get highest weightage of 55 points. “Weightages will be 14, 27, 14 for low, medium and high price reserve scenario,” the source said.

The biddable work programme for deepwater block (type-A) would have a total 15 points — 4 points would be assigned to the exploratory wells, seven points to 3-D survey and four points to other surveys of the block.