Coal & Petroleum - Indian Budget 2006 – 2007 (79 - 80)

Coal

79. A comprehensive review of the coal policy is underway. This year, 45 coal blocks have been allotted for captive consumption to the power, cement and steel sectors and to the State Governments. After reserving blocks for Coal India Limited and its subsidiaries for the period up to 2012, it has been decided to de-block coal reserves of 20 billion tonnes for power projects. The definition of captive consumption will also be amended to allow coal mining by producers with firm supply contracts with steel, cement and power companies. The capacity of Central Mines Planning and Development Institute Limited (CMPDIL) to drill in order to prove reserves is now only 200,000 metres per annum, and this will be expanded substantially.

Petroleum

80. Energy security is high on the Government’s agenda. In five rounds of the New Exploration Licensing Policy (NELP), 110 production sharing contracts have been awarded. Ministry of Petroleum and Natural Gas has now made its biggest offer under NELP VI. 55 blocks and an area of 355,000 sq kms, which is thrice as large as the previous round, have been offered. Besides investment in the upstream and downstream segments, we are encouraging investment in refining, pipelines and green fuel projects. In the refinery sector alone, an investment of Rs.22,000 crore is expected in the next few years.