The Cabinet Committee on Economic Affairs (CCEA) approved award of five more oil and gas blocks that were offered in the ninth round of bidding under New Exploration Licensing Policy (NELP).

The government had offered 34 areas for exploration and production of oil and gas in NELP-IX in 2010 and bids for 33 were received at the close of bidding on 28th March last year.

Of these, CCEA in March awarded 16 blocks to firms like ONGC while bids for 10 blocks were rejected due to bidders offering lesser than expected profit petroleum.

The CCEA at its meeting on Thursday approved award of five more blocks, Oil Minister S Jaipal Reddy told reporters in New Delhi.

In all the CCEA was to consider award of six onland and two offshore blocks but only five blocks were approved, he said but did not give reasons for not awarding three blocks.

Mumbai basin deepsea block MB-DWN-2010/1 was awarded to consortium of UK’s BG Exploration & Production Ltd and BHP Billiton Petroleum (International Exploration) Pty Ltd of Australia.

BG-BHP combine beat a consortia of Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and GAIL to the block.

Shallow water block MB-OSN-2010/2 in the same basin is due to be awarded to a consortium of OIL, Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petro Resources Ltd, who were the sole bidders.

Sources said the required clearance from the Ministry of Defence had been received for exploration in the two offshore blocks.

Earlier, the two Mumbai basin blocks could not be awarded to the first ranked bidders as there was no defence clearance.

The Assam-Arakam basin onshore block AA ONN-2010/1 went to a consortium of Prize Petroleum and ABG Energy.

In the previous eight rounds of NELP, 235 blocks were awarded. The 34 exploration blocks offered in NELP-IX included eight deepwater blocks, seven shallow water blocks, 11 on-land blocks, and 8 Type-S (or small) on-land blocks.

In March, state-owned Oil and Natural Gas Corp (ONGC) cornered six blocks – four as operator and two as minority partner, but saw its bids rejected for 8 areas including five deep-sea blocks.

Based on recommendations of an Empowered Committee of Secretaries (ECS), the CCEA was to consider rejecting bids of Ishar Gasoil Pvt Ltd for three blocks for failure to meet networth criteria.

Ishar Gasoil was top bidder for Rajasthan block RJ-ONN-2010/1, Ganga Valley block GV-ONN-2010/1 and Cambay basin block CB-ONN-2010/2.

But the CCEA did not consider awarding the blocks to the next highest bidder as Ishar Gasoil had moved court against the ECS recommendation.

“The proposal for three blocks RJ-ONN-2010/1, CB-ONN-2010/2 and GV-ONN-2010/1 could not be placed before CCEA for consideration due to filing of Writ Petition by Ishar Gasoil Pvt Ltd,” an official statement issued in New Delhi said.

Since Ishar Gasoil was sole bidder for GV-ONN-2010/1, this block as per ECS was not be awarded at all.

The Rajasthan block was to go to the next highest bidder, a consortium of GAIL, Bharat PetroResources Ltd (BPRL), BF Infrastructure Ltd and Monnet Ispat & Energy Ltd.

A consortium led by Deep Energy was to get the Cambay block. Sankalp Oil and Natural Resources which was awarded three blocks by CCEA in March, had not signed contract for two Cambay basin blocks.

Because of this, the CCEA decided to cancel award of CB-ONN-2010/9 and CB-ONN-2010/8 blocks to Sankalp and awarding them to next highest bidders — ONGC and a consortia of BPRL, GAIL, Engineers India, BF Infrastructure and Monnet respectively.

An official statement issued in New Delhi said the CCEA approved “cancellation of two blocks — blocks CB-ONN-2010/8 and CB-ONN-2010/9 awarded to Sankalp Oil and Natural Resources Ltd and award of five blocks to the first ranked / single / next highest ranking bidder”.

“The approval will accelerate exploration and production activities in the country and is expected to result in hydro-carbon reserve accretion, thereby, increasing the energy security of the country,” it said.

“The cancellation of award of two blocks under NELP-IX would be a deterrent for non-serious bidders”.