Oil well auction fails to attract India Inc
March 28: The ninth round of New Exploration and Licencing Policy (NELP), meant to attract commercial interest in oil and gas exploration, has received a lukewarm response from oil companies. The 33 blocks on offer received a total of 74 bids, with no interest from international oil majors such as Exxon Mobil and Chevron.
Public sector oil major ONGC bagged 10 of the blocks, while Reliance Industries successfully bagged two. Of the 34 blocks on offer, 1 received no bids while another 14 blocks got just one bid. There is some speculation that foreign investors have been put off by the long delay in granting government approval to the Cairn-Vedanta deal. Among other PSUs, Oil India led consortium won three blocks. As far as international players are concerned BHP Billiton and BG Group Plc jointly won one block, said sources.
Some 37 companies including eight foreign companies and 29 Indian companies had bid either on their own or as a part of consortia. Europe’s second-biggest oil company, BP which had only last month agreed to pay $7.2 billion for stake in 23 blocks operated by Reliance Industries also didn’t participate in the NELP-IX. The recent controversy on the delay in granting a nod to Cairn PLc to sell its stake in an oil field to Vedanta may also have kept big foreign players out of the NELP auction. However, petroleum minister rejected that Cairn-Vedanta deal would have an impact on the NELP rounds.
“We have not taken a negative view nor a positive view... We have maintained absolute neutrality,” said Mr Reddy. He said that the government has put in place a very transparent policy. “Full justice is being done to foreign companies. It is not for want of an inviting atmosphere in India that they did not bid,” he said. He added that the response to this NELP-IX has been more than satisfactory.
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