KOLKATA (miningweekly.com) - The Indian government is considering reclaiming about 60 marginal oil and gas blocks allotted to State-owned exploration and production (E&P) companies, and adding them to the list of blocks up for auction.

In a bid to kick-start the flagging interest in investments in the domestic hydrocarbon sector, the government’s withdrawal of these "marginal and under-developed blocks in difficult geographies" was aimed at handing them to efficient E&P majors which could bring in appropriate technology, a senior government official said.

These 60 oil and gas blocks had been awarded to government-owned and managed E&P companies like Oil and Natural Gas Corporation and Oil India Limited on a nomination basis, but the two had been unable to develop these assets for various reasons ranging from low recoverable resource to difficult terrain for project implementation, the official said.

The E&P companies had been asked to draw up a list of all their marginal blocks, which had been lying idle, so that they could be offered to new investors through the proposed auctions, the official added.

The current owners of the oil and gas blocks were asked to appoint a consultant to make fresh assessments of the economic potential of the blocks before they were relinquished for an auction.

However, the withdrawal of oil blocks was not independently confirmed by the companies as the issue was sensitive and company officials were not authorised to comment on it.

The 60 marginal blocks would be added to the list of 70 already discovered new blocks, which were part of the proposed auction under the tenth round of the New Exploration and Licensing Policy (NELP).

NELP IX had been scheduled for January 2014 but had failed to take off in view of perceived lukewarm interest from global E&P companies and differences within the government over the terms of contract with investors.

The government had been caught between the vexed issue of basing such contracts on production sharing and revenue sharing with successful bidders.

Under previous rounds of NELP bidding since 1999, the government had awarded about 350 oil and gas blocks entailing investment of $21-billion.