The union petroleum ministry had recently approved 18 production-sharing contracts for exploration blocks, pending since 1994. Negotiations are now afoot at a frenetic pace to iron out glitches holding up 12 production-sharing contracts for discovered oil fields.

The only medium-sized field awaiting a nod for its contract is the Ratna and R-series field on the Bombay offshore, that had been offered to Essar Oil Ltd and Premier Oil Pacific. Medium-sized fields entail 40 per cent participation by national oil companies like the Oil and Natural Gas Corporation (ONGC) or Oil India Ltd (OIL).

Essar Oil and Premier Oil Pacific expressed reservations about the discovered-oil policy, compelling the petroleum ministry to refer it back to the union cabinet. A cabinet note on thediscovered-oilfields policy has been pending since the tenure of the United Front government and is likely to be discussed shortly. All the other 11 contracts are for small onland oilfields, mostly in Gujarat. Operators of small fields do not have to offer any participation in production to the national oil companies. Most of the hitches holding up these contracts, related to levies like sales tax, liabilities of sub-contractors or environmental issues, are being sorted out.

A consortium comprising GSPC, the Hindustan Oil Exploration Company and AMEC Heritage have opted for as many as six small fields in Gujarat, at north Balol, Kanwara, Allora, Unawa, north Kathana and Dholsan. Selan Exploration Technologies plans to drill at two fields, Karjisan and Ognaj, in the same location.

Hydrocarbon Resources and Development plans to produce oil at Anjanpur, also onshore in Gujarat. A consortium of the Assam Company and Joshi Technologies Inc of the US plans to operate the Amguri oilfield in Assam.

Since1992, the Centre has offered 30 discovered fields to the private sector, including six medium-sized fields. So far, oil companies have been able to sign on the dotted line for 13 small oilfields and five medium-sized ones. The Centre had also offered 35 exploration blocks, of which 26 contracts have so far been signed, including the 18 approved by the petroleum ministry on May 15. The drive to push forward pending contracts comes on the eve of the New Exploration and Licensing Policy (NELP), which should allow open-acreage bidding for oil reserves in the country. The 30 discovered fields and 35 exploration blocks offered to the private sector in the last eight years, were reserves that ONGC or OIL had not considered worth tapping. The response from the private-sector investors (including multinationals) had consequently been at best lukewarm.

The NELP package is designed to be more attractive. The incentives are expected to rope in private-sector investment in oil exploration and production, so that some ofthe massive shortfall in oil demand and availability anticipated, may be bridged. Already the oil import bill is a drain on 30 per cent of the country's export earnings.

INSIGHT

The 12 discovered oilfields on offer are those which ONGC has for one reason or another avoided exploiting. Since 1992, contracts have been signed for 18 discovered oilfields under a production-sharing arrangement with a national oil company. Of the remaining dozen, Ratna and R-Series at Bombay offshore alone is a medium-sized oilfield. The others are small ones, which may be offered without the production-sharing condition with national oil firms.

The government, in an attempt to hasten exploitation, has recently approved contracts for 18 exploration blocks. The urgency arises from the need to slow down the growth of India's oil imports and also to get in oil multinationals, in the expectation that they would lobby against sanctions.