KOLKATA (miningweekly.com) - India’s Petroleum and Natural Gas Ministry, which was planning to auction oil and gas blocks in January 2014, was working to offer environmental and security clearances for these blocks prior to inviting bids.

Given that exploration work on some 75 oil and gas blocks previously awarded to investors was currently held up by delays in clearances, the government was aiming to package in-principle approvals along with the blocks to ensure greater participation of foreign investors in the auctioning, a Ministry official said.

The issue of approvals was gaining the Ministry notoriety, after mining major BHP Billiton relinquished nine oil and gas blocks last month, following delays in approvals from the Indian defence establishment, the official added.

Several global resources companies have cited inordinate delays in the granting of mandatory security and environmental clearances as the single biggest deterrent to foreign investments in oil and gas exploration, and in response, the Ministry had set up a committee, comprising representatives of all concerned Ministries, to coordinate and offer prior in-principle clearance before the oil and gas resources were put on the block in the New Year, the official said.

The government had identified 86 oil and gas blocks for exploration, but the exact number to be put up for auction was yet to be decided. The January auction would be the tenth round under the New Exploration Licensing Policy, first framed in 1997, which permitted 100% foreign direct investment in oil exploration and development, and which had seen 254 blocks awarded to date.

Officials said that representatives from India’s defence forces had been included in the committee to sanction advance clearances and this was one of the reasons why the exact number of blocks to be put up for auction had not yet been fixed.

To avoid a situation where foreign investors could see security clearances being withheld following the bidding process, the Ministry felt that it would be prudent to exclude altogether blocks where security concerns expressed by the defence forces proved to be insurmountable.