“Out of 34 blocks, 19 blocks are totally new areas — seven in deep sea, two in shallow waters and 10 on land,” he said.

The deadline for making a bid for the 34 blocks under new exploration licensing policy (NELP), that also include 15 recyled blocks covering a sedimentary basin area of 88,807 square kilometers, is March 18, 2011.

“NELP 9 has been launched amid positive economic conditions, including revision of APM (administered price mechanism) gas price and market determination for price of petrol,” Deora said.

In its previous eight rounds of auctions since 1999, New Delhi has awarded 235 blocks. “This has resulted in enhancement of exploration coverage from 11 per cent to about 58 percent of Indian sedimentary basin between 2000 and 2010,” he said.

“The discoveries made under the NELP have resulted in in-place hydrocarbon reserve accretion of a staggering 642 million tons of oil and oil equivalent gas,” he added, referring to the 87 oil and gas discoveries made in 26 blocks under NELP in past decade.

India, which imports more than two-thirds of its crude oil needs and is keen to reduce its dependence on overseas purchases, has removed the tax exemptions given to investors in the crucial sector.

That means investors will not be able to avail any profit or income-based tax incentive now onwards as the government is planning to do away with these perks under the new Direct Tax Code (DTC).

“Investors basically want clarity in NELP 9. Position is absolutely clear,” said India’s Petroleum Secretary S Sundareshan. “The DTC, once in force, will apply to all production sharing contracts in the future including under NELP 9.”

Until then, the production-sharing contracts will be governed by the existing income tax laws.

Under the current Income Tax Act, companies that started crude oil production before April 1, 1997 are exempted from paying taxes on profits for seven years. Refineries, which started operations after Oct. 1, 1980, and before March 2012 are also eligible for the same level of incentive.

However, no tax breaks are given to natural gas finds, except for the gas that is to be produced from NELP 8 blocks and the four coal bed methane (CBM) 4 blocks.

Sundareshan said the move would not have any adverse impact on investments into the sector, but would help companies design bid documents better.

“We anticipate better response (than NELP 8 which was held when the world economies were in recession,” he said, adding blocks have been selected after careful study and more data is being offered for bidders to make a decision.

India, which received bids for only 36 of the 70 blocks offered in previous auction, has slashed the number of blocks in the latest round and is also focusing on onshore and shallow water acreage, that are significantly cheaper to operate.