NEW DELHI (Commodity Online): India?s Oil exploration spending under New Exploration and Licensing Policy (NELP) I-VIII has risen 96% from 2006-2011, according to Ministry of Petroleum and Natural Gas.
According to Oil Ministry data, US 1168.53 mn was spent in 2006-07 while in 2010-11, it has risen to US$ 2293.93 mn.
The Ministry termed as ?factually inaccurate? reports in the media that there has been a drastic drop in exploration spending in NELP blocks from US $ bn in 2007 to US$4.7 mn in 2011.
NELP-IX has been awarded recently and committed investment in the awarded blocks is about US$582.29 million. Investment level will increase with further development of discoveries.
The Ministry clarified that: The timelines are specified in the respective Production Sharing Contracts (PSCs) for various stages from exploration, discovery to development under New Exploration Licensing Policy (NELP). As per PSC, Contractor takes about 7 years for exploration. The development of offshore discoveries in shallow water takes about 4 to 5 years, while in deepwater the average time taken for development of discoveries may be about 9 to 10 years. The Contractor is required to adhere to the timelines specified in PSC and hence there exists a certain time gap, especially in case of development of offshore and deepwater discoveries, from discovery to development.
Several other factors, such as geographical location, geological and reservoir parameters, Contractor?s development strategy and business model, availability of infrastructure, prevailing prices of oil and gas etc. influence the timeline for development of oil/gas discoveries. Consequently, expenditure is incurred by the Contractor, keeping in view the various stages as outlined above, the clarification added.
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