India’s largest ever auction of oil and gas blocks has received a poor response from private and global players in the hydrocarbon industry, majority of whom have preferred to stay away from bidding in the New Exploration Licensing Policy (NELP) round VIII. None of the five top global majors, namely Exxon, Shell, Chevron, Statoil and Conoco Philips, participated with bids.
Although, the Union Petroleum and Natural Gas Ministry had claimed good response to its road shows across various countries, only 36 of the 70 blocks on offer attracted bids with State-run Oil and Natural Gas Corporation (ONGC) and its partners bidding for 25 blocks. Reliance Industries Limited (RIL), which had won 45 blocks in the previous round of auctions, stayed away from making any bid in the lastest round except for one coal bed methane (CBM) block.
The Directorate General of Hydrocarbons, V. K. Sibal, blamed the dispute between the Ambani brothers for the poor international response stating that signals were not good before such a prestigious auction.
Eight out of the 10 coal bed methane (CBM) blocks that were offered simultaneously attracted 26 bids, the maximum six bids coming from Essar Oil. ONGC, in partnership with Jindal Petroleum and Nevyeli Lignite Corporation, bid for three. Only four foreign firms, including BHP Biliton of Australia, BG Group and Cairn India bid for offshore blocks.
Of the 47 bids received for 15 onland blocks, 37 were for small S-type blocks for which there was no stringent criteria of previous oil and gas experience for bidding. Petroleum Secretary R. S. Pandey told journalists that the government would go for fresh round of auction — originally expected to attract $5 billion in investment if bids were made for all blocks — after making necessary changes in the process.
“You may think the number is somewhat less. But if you look at the performance of bidding throughout the world this year, given the economic downturn, we have done better than many. The blocks are not going anywhere. We will talk to the oil companies again,” he added.
Mr. Pandey also said that not a single clause in pricing and marketing freedom had been altered for the latest round and that the interest expressed for 36 blocks clearly showed that the response was for more than 50 per cent.
