New Exploration License Policy (NELP)-VIII

The New Exploration Licensing Policy (NELP) was launched by the Government for accelerating the pace of hydrocarbon exploration in the country. NELP provides a level playing field in which all the parties may compete on equal terms for the award of exploration acreage.
some points:
  1. Government of India announced NELP in 1997-98 budget.
  2. It took 2 fiscal years and 2 successive government to finalize.
  3. A slurry of tax incentive were promised to prospective investors.
  4. After several go and halt signs by GOI, NELP finally got Underway in 1999.

What Are The Main Features of NELP? (Read Attraction for Investors)

  1. There is Fiscal stability provision in the PSC (Production Sharing Contract ).
  2. No signature, discovery or production bonus.
  3. No customs duty on imports.
  4. No mandatory state participation.
  5. No carried interest by National Oil Companies (NOC).
  6. Freedom to the contractor for marketing of oil & gas in the domestic market.
  7. No cess on crude oil production.
  8. Royalty to be paid on crude oil & natural gas on Volume basis.
  9. Income tax holiday for 7 yrs from start of commercial production.

What are Objectives of NELP?

  1. Private participation for Intensive exploration of Indian basins.
  2. Provide avenue for opening up of acreages in ultra deep water & frontier areas.
  3. To bring-in new & state of art technology in exploration & exploitation.
  4. Level playing field to all participating companies.
  5. Transparent Bid Evaluation system .

Background of Oil Exploration in India:

  1. Oil exploration in India commenced in 1866 when Mr. Goodenough of McKillop Stewart company drilled a well near Jaypore near upper Assam.
  2. First commercial oil discovery in 1889 at Digboi.
  3. In 1893 rights were granted to Assam oil syndicated to erect a refinery and led to formation of Assam Oil Company (AOC) in 1899.
  4. After independence GOI realized the importance of Oil & Gas and framed Industrial Policy Statement of 1948.
  5. Indo-Stanvac Project : A JV between GOI and Standard Vaccum Oil Company of US in 1953 gave the first oil discovery of independent India near Nahorkatiya.
  6. In 1955 GOI established ONGD (Oil and Natural Gas Directorate) with the help of GSI (Geological Survey of India).
  7. From 1958 ONGC started its exploration in: Himalayan Foothills – Ganga Plains , Alluvial tracks of Gujarat , Upper Assam and West Bengal , Cambay Basin
  8. In 1962 experimental seismic surveys were carried out in Gulf of Cambay. Also western offshore survey details resulted in Bombay offshore India’s biggest commercial discovery.
  9. In 1990 commercial oil discoveries by OIL in Rajasthan and Assam in 1991.

Some More Discoveries:

  1. Discovery of Naharkotiya in NE in 1953
  2. Ankleshwar in Cambay Basin in 1958
  3. Mumbai High in Mumbai Basin in 1972
  4. Cauvery in 1958 (Karaikal-1)
  5. Jaiselmer sub-basin in 1958 (Manhertibba- 1)
  6. Assam-Arakan yoma fold belt in 1973 (Baramura-1)
  7. Krishna-Godavari in 1982 (Narsapur-1)

Rounds of Oil Exploration in India:

  1. 1st Round of Exploration – 1980 – 32 Offshore blocks
  2. 2nd Round of Exploration – 1982 – 50 Onshore and Offshore blocks
  3. 3rd Round of Exploration – 1986 – 27 Offshore
  4. 4th Round of Exploration – 1991 – 72 Blocks (39 Offshore & 32 were Onland)
  5. 5th & 6th Round of Exploration – 1993 – 45 Blocks
  6. 7th & 8th Round of Exploration – 1994 – 45 Blocks


  1. Since operationalizing the NELP in 1999, in seven rounds of NELP, 203 Production Sharing Contract (PSC) have been signed, thereby increasing the area under exploration more than four times.
  2. In the NELP-VII, 181 bids were received from 95 companies including 21 foreigncompanies. Under NELP, 68 oil and gas discoveries have been made by private/joint venture (JV) companies in 19 blocks, which have added morethan 600 MMT of oil equivalent hydrocarbon reserves.
  3. As on April 1, 2009, investment commitment under NELP is about US$ 10 billion on exploration, against which actual expenditure so far under NELP is about US$ 4.7 billion. In addition, US$ 5.2 billion investment has been made on development of discoveries.

Progress Made So Far :The following Picture shows the progress made so far


  1. India’s eighth round of New Exploration Licensing Policy (NELP-VIII) is offering the highest ever number of 70 exploration blocks covering an area of about 1,63,535 Sq. Km.
  2. The Govt. is also making a simultaneous offer of 10 blocks under the fourth round of Coal Bed Methane Policy (CBM-IV) for exploration and production of Coal Bed Methane. The blocks offered under CBM-IV cover an area of about 5000 Sq.Km. and are spread over seven States.
  3. The NELP-VIII licensing round has been put on offer against a backdrop of continued exploration success. Under NELP, 68 oil and gas discoveries have already been made in 19 exploration blocks. Hydrocarbon accretion has already been more than 600 Million Metric Tonnes of oil equivalent.
  4. First deepwater crude oil and natural gas has commenced from NELP-I block KG-DWN-98/3(D-6). With this, the gas production from the eastern part of the country would double the present production of gas and in monetary terms, it would be worth about US$ 42 billion.
  5. Following extensive consultation the views of various stakeholders have been taken into account while finalizing the bid documents for NELP-VIII and CBM-IV which contain some improvements and simplification in the bid evaluation criteria and Model Contract/ Model Production Sharing Contract.
  6. The bid closing date for NELP-VIII and CBM-IV is 10th August, 2009. As in previous rounds, roadshows will be held and data rooms will be opened at global oil and gas locations.

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  • Anonymous

    Unique article ,you can find such articles anywhere else …

    Sir ,can u plz give a similar article on the Kaveri river water issue thats going around in karnataka and tamil nadu from a very long time ..
    We keep on hearing about that but dont know whats inside ….

  • Anonymous

    i mean u cant find such articles anywhere else ..

    srry for the mistake above in my comment

  • Reshu

    nice article