NEW DELHI, May 7: The new exploration and licensing policy (NELP) will be kick-started in July, with exploration blocks left over from the nine rounds of bidding being offered for the first round of open acreage system of tendering.

These blocks are being offered first, to allow the ministry time to complete the entire paraphernalia of finalising a model contract and earmarking the oil grid. The finalising of the model contract and the national oil grid will really bring the open acreage tendering allowed by the NELP into full swing.

The model production sharing contract, that will determine the contractual obligations of the oil companies and the centre, is expected to be ready by November.

The national oil grid, that will divide up the 16 unexplored oil basins in the country into a one-minute-by-one-minute grid, is also expected to be marked out by that time.

Oil blocks that were already identified during the several rounds of bidding since 1991, but have so far found no takers, will meanwhile, be offered for the open acreage tenders. These blocks too are yet to be identified. Petroleum ministry sources said the Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) were being consulted in identifying these blocks as ``in some cases they want the blocks back.'' It is not clear whether these blocks will find much enthusiasm among foreign investors and private sector oil exploration companies though.

Private sector oil hunters have privately accused OIL and ONGC of keeping plum acreage with themselves. The open acreage system will allow prospective oil explorers to pick blocks and even define the area that exploration block should cover.

The union petroleum ministry will then issue advertisements, allowing competing oil companies to quote their bids for the chosen block. The system, designed to woo oil exploring companies that have so far played hard to get, is almost a reversal of the bidding process that began in 1991.

The centre has since then earmarked blocks and advertised for bidders. The open acreage system therefore, will only be fulling operational when the earmarking of the national oil grid is complete. The oil grid is being prepared by the director general of hydrocarbons (DGHC).

The DGHC will also prepare the data packages on the exploration blocks that will be offered to prospective oil explorers. Such data have in the past been offered by the two national oil exploration companies, the ONGC and OIL. The model contract is intended to be simpler and more in tune with international norms. Sources say the new terms will be refinements over standard clauses, like security, liabilities and environment norms, that have been the basis of the 35 oil exploration contracts signed till date thes sources said.

The model is now circulating among oil companies, including both national oil companies like ONGC and foreign and private sector investors, like Royal Dutch/ Shell International or Essar Oil.

The refinements in the model contract, on the basis of the feedback from the oil companies, will be incorporated and frozen, within the coming fortnight.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.