Govt to call global tender for petroleum exploration

Kathmandu, May 19: The government is planning to call a global tender to explore for petroleum at multiple points across the country.

The government has identified 10 blocks, from Dhangadhi in the west to Biratnagar in the east, that have petroleum potential, said Minister for Industry Nabindra Raj Joshi while addressing a press conference organised at the ministry on Friday.

According to him, proposals will be called from international companies for petroleum exploration and development in all those blocks.

"There have been remarkable achievements in terms of petroleum sector development process. Petroleum Regulations, 1985 has been amended for the fifth time in order to make timely changes in the legal provisions. The amendment has simplified the modalities and processes of selecting companies for petroleum exploration and development," minister Joshi said.

In order to save the petroleum fields from a low-bidding syndrome and make sure that the country gets due benefits, the ministry has been mulling over awarding the projects to technically capable companies.

"The companies that participate in the tender process will be evaluated on the basis of both technical and economic aspects. We have decided to give 70 and 30 per cent weightage to technical expertise and economic capability respectively," said the minister.

He said that if everything goes as per the plan, within 4-5 years the country would be drilling its own oil.

A high-level government committee had directed the Ministry of Industry (MoI) in March last year to initiate the petroleum exploration process in 10 blocks across the country in the Terai and Chure area.

The Infrastructure Project Monitoring High-Level Committee had even asked the ministry to seek technical assistance from other countries to conduct geological studies.

The government has divided the Terai and Chure hills into 10 exploration blocks, each consisting of about 5,000 square kilometers.

The identified blocks are Dhangadhi, Karnali, Nepalgunj, Lumbini, Chitwan, Birgunj, Malangawa, Janakpur, Rajbiraj and Biratnagar, from 1 to 10, respectively.

Petroleum exploration in Nepal was initiated in the 1990s after a company from the USA, Texana, was allowed to drill to extract oil at two blocks - Banke and Chitwan.

In 2004, a British company, Cairn Energy, obtained license to explore five fields – Dhangadhi, Karnali, Lumbini, Birgunj and Malangawa.

But citing the Maoist insurgency and political instability, these companies continued to shy away from the exploration. Two other companies, BBB Champion and EABG, joined the petroleum exploration bandwagon in 2012, with licenses to explore the Biratnagar and Janakpur blocks respectively.

However, as the companies remained inactive for many years, the government scrapped the licenses of these companies in January 2015.

A Chinese company had come to Nepal for the same purpose after the government made a request to the Chinese counterpart.

But, according to the director general of the Department of Mines and Geology, Rajendra Prasad Khanal, the company is yet to submit its report.

Meanwhile, the government has approved the National Mines Policy, 2017.

The policy is said to increase the contribution of minerals in the economic development of the country, pave the way for Foreign Direct Investment (FDI) in the sector and channelise more government investment into the development of the mines sector.

The ministry has decided to expedite the works to excavate iron ore at Dhaubadi of Nawalparasi district.

Khanal said that the site in Dhaubadi has enough iron ore, where about 3,000 metric tons of iron ore can be extracted per day for 50 to 60 years.

Similarly, the government has also decided to bring the Nepal Metal Company Limited into operation. The company, established three decades ago in Dhading with the aim of extracting zinc-lead ores, couldn't come into operation and had remained dysfunctional for many years.

(Published in The Rising Nepal Daily, May 20)