Mumbai: The government has rejected Oil and Natural Gas Corporation''s (ONGC) proposal to form a joint venture with British Gas (BG) for exploration in three deep-sea blocks in the Krishna-Godavari basin. The government has kept the allotment in abeyance and the blocks will now be offered afresh in the next round of tender under NELP.

"It has been decided to offer these blocks in the ensuing rounds of New Exploration Licensing Policy (NELP)," minister of state for petroleum and natural gas Dinsha Patel informed the Rajya Sabha in a in a written reply.

Patel said the blocks were awarded to ONGC way back in April 2000 on a nomination basis and the NELP terms allowed it to seek strategic alliances to explore and develop six deep-sea blocks, including three blocks in the Krishna Godavari basin -- KG-OS-DW, KG-OS-DW-Extn and KG-OS-DW-III.

"The validity of licence in respect of one of the three blocks has already expired while the other two blocks are due to expire in January and May, 2007 respectively," he said, adding that it was only in 2006 that ONGC approached the oil ministry seeking approval for a strategic alliance with British Gas for the three KG blocks.

"ONGC''s offer of these blocks does not seem to have been able to generate sufficient interest among bidders, whereas under NELP offerings, extremely keen competition has been witnessed particularly for all KG blocks," he said.

"Considering these factors, within the overall exploration policy of the Government of India regarding a level playing field and emphasis on transparency, it has been decided to offer these blocks in the ensuing rounds of NELP, upon expiry of their petroleum exploration licence validity," Patel added.