Big Oil coming to India, finally

Exxon, Chevron & Conoco may participate in NELP-VII.

ExxonMobil, the world's largest oil company, and ConocoPhillips and Chevron of the United States, are likely to participate in India's seventh round of the New Exploration and Licensing Policy (NELP-VII), according to Director General of Hydrocarbons V K Sibal.

This will significantly swell the ranks of international oil giants keen to participate in the auction of oil blocks for exploration and production in India.

None of the three participated in the sixth round of auctions in March this year, when the government allotted 55 blocks. 
 

NELP SO FAR
	Blocks offered	Blocks bid for	Bids received
NELP I	48	28	45
NELP II	25	23	44
NELP III	27	24	52
NELP IV	24	21	44
NELP V	20	20	69
NELP VI	55	52	165

More global giants lining up bids is being seen by government officials as proof that scepticism over the Indian exploration and production market is over.

"All leading international companies are heading to India as there are sufficient resources and market within the country," said one.

In the six rounds of NELP so far, only eight international majors submitted bids, of which Australia's Santos, UK-based Cairn Energy and British Gas won exploration blocks.

The seventh round was slated to begin in April this year, but got deferred to August due to shortage of rigs the world over. It is now scheduled to begin in November.

"In all, 80-85 blocks will be auctioned under NELP-VII," Sibal told reporters today on the sidelines of a seminar organised by the Confederation of Indian Industry in Mumbai.

The increased international interest comes in the wake of recent strikes by Reliance Industries, Oil and Natural Gas Corporation and Gujarat State Petroleum Corporation "" offshore as well as onshore.

The government has often raised concern over the absence of big oil companies, which not only have the money but also advanced technology, in exploration and production.

So far the international companies have been content to buy stakes in discovered oil and gas blocks.

Recently, Brazilian company Petrobras and Norway's NorskHydro bought stakes in the ONGC-discovered oil block in the Krishna-Godavari basin. Italy's ENI bought into ONGC's Mahanadi block.

Although there is confusion over the pricing of gas discovered in blocks awarded under the NELP regime, international oil companies appear confident that the issue will be resolved before the next auction of blocks.

DGH, the nodal body to ensure optimum utilisation of the country's oil and gas reserves, will also for the first time auction blocks in Jammu and Kashmir.

Sibal said NELP-VII would cover a total of 400,000 sq km and the focus would be on the west coast of the country. "The off-shore and on-shore ratio will be almost 50-50," he said.