"Before the next round (of exploration licensing) we would like to put in place a more investor friendly regime both for investment and from point of view of pricing," oil minister S. Jaipal Reddy said on Sunday.

Companies have to get government approval for the formulae they use to work out selling prices for the oil and gas under the current rules.

India, the world's fourth-biggest oil importer, wants to tap domestic supply to cut its ballooning import bill and widening budget deficit.

So far local companies have dominated the auctions for Indian licences and the government wants to attract more overseas bidders.

Speaking at the Petrotech energy conference, Reddy said a panel headed by C. Ranagarajan, chairman of Prime Minister's economic advisory council, will submit a report in the next few weeks suggesting improvements to the current exploration policy.

"It is our endeavour to initiate tenth round (of auction) in this calendar year," he said, adding the cabinet has to approve the recommendations of the panel.

Oil secretary G. C. Chaturvedi said from the next exploration round, the oil ministry will obtain approvals from various ministries including environment and defense before the oil and gas blocks go under hammer.

He said contractors on about a dozen blocks are awaiting defense approvals for carrying out exploration.

Mining major BHP Billiton (BHP.AX) said in its annual report that off-shore Indian exploration has been hit due to delays in getting permits from the defense ministry.

BHP Billiton, which operates 10 offshore blocks, and its local partner have claimed force majeure as a result of these delays.

(Reporting by Nidhi Verma, additional reporting by Florence Tan in SINGAPORE; Editing by Erica Billingham)

• A Permanent Economic Emergency