Updated: February 10, 2014 2:09:03 am
In a setback to the latest oil and gas block auction round, the Gujarat government has withdrawn clearance for the nine areas falling in the state that are part of the offerings under 10th round of the New Exploration Licensing Policy or NELP-X.
The state government had on January 16 given its approval for offering nine blocks in the Cambay basin of the state for offering in NELP-X. But soon after, it withdrew the approval, a top petroleum ministry official said.
The Central government, which as per the Constitution is the owner of both offshore and onland hydrocarbon resource, last month unveiled 46 blocks for offering in NELP-X the first auction round in two years. These blocks are made up of 17 onland areas, 15 shallow water and 14 deep sea blocks. Of the 17 onland blocks, nine are in Gujarat.
The official said Gujarat wants a share of revenues that the Centre will earn from the oil and gas produced.
This share of the Centre’s revenue is additional to the royalty at the rate of 12.5 per cent of price realised on sale of crude oil and 10 per cent for natural gas that currently flows to the state government.
NELP-X auction is to be held under a revenue-sharing model where the bidder quoting the highest amount of oil and gas production it is willing to give to the government will get the block. Gujarat wants a share of this revenue, the official said.
“We are examining the Gujarat government’s written communication withdrawing approval for the blocks,” he said. If the issue isn’t resolved soon, NELP-X round may get deferred and the new government formed after the elections would have to decide.
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