Oil majors team up with Oilex for Oman blocks

Four domestic oil companies, GAIL, Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Ltd and private sector Videocon Industries, in consortium with Australia's Oilex NL have bid for two blocks in Oman.

The consortium has bid together for onshore blocks 56 and 58 located off south Oman salt basin. "We have participated in the bidding procedure for two blocks in Oman in consortium with other companies," a GAIL source said.

GAIL, Oilex and Videocon are expected to hold 25 per cent interest each in the block after the acquisition, while Bharat Petroleum and Hindustan Petroleum will have 12.5 per cent each, the source indicated.

In January, Oman's oil and gas ministry had sought bids from interested parties for five of its onshore exploration blocks "" 54, 55 and 56 in the Eastern Flank area and 57 and 58 located in the Western Margin region of the country.

He said the consortium's bid amount of $50 million included a signature bonus as demanded by the Oman government.

A signature bonus is an upfront payment representing a fraction of the investment required to extract oil and gas.

As per the bidding rules, in case of a tie between two or more bidders, the Oman government would offer the block to the party which has offered a higher signature bonus.

The government has also reserved rights for picking up 20 per cent stake in any block which makes a commercial discovery.