NELP VI may throw up new partnerships

The auction of oil blocks under NELP VI, for which bidding closes today, could see the emergence of some new partnerships and players in India's upstream sector.

Mukesh Ambani's Reliance Industries, which has a downstream tie-up with Chevron, is expected to bid with multiple partners. Those in the fray include Chevron and Exxon Mobil.

For the latter, it would be its first foray in India. Reliance is also reported to be negotiating with the Calgary-based Petro-Canada.

Anil Ambani's Reliance Natural Resources (RNRL) is also expected to partner a global major. The Gujarat-based Adani group has tied up with Naftogaz of Ukraine.

ONGC, the domestic upstream major, is expected to bid jointly with global majors such as Conoco Philips and Petroleo Brasileiro SA (Petrobras) of Brazil.

Gas Authority of lndia Ltd (GAIL) is likely to bid for 26 of the 55 blocks on offer, mainly deep-water blocks, with multiple partners. GAIL also has a tie-up with Arrow Energy of Australia and Tata Power for the Coal Bed Methane blocks on offer.

Bharat Petroleum Corporation Limited (BPCL) has already entered into a memorandum of understanding with Petrobras, Brazil's national oil company, and Foresight Oil of the UK for cooperation in "upstream, midstream and downstream activities in the oil and gas sector in India and abroad, with the immediate objective of bidding for NELP-VI blocks."

Australian oil major OilEx has firmed up plans to tie up with Videocon Industries. Petroliam Nasional Bhd (Petronas), Malaysia's national oil firm, has also shown interest in bidding for the oil and gas blocks being offered under NELP VI. ENI and Shell of US, Totalfina of France, Scotland's Cairn Energy, British Petroleum and Santos from Australia are likely to be the other bidders.

On offer are 24 deep-water, 6 shallow and 25 on-shore blocks. The total investment for the exploration of these blocks is estimated at $5 billion.

The last round of bidding, under NELP V, offered 20 blocks (6 deep-water, 2 shallow-water, and 12 on-shore blocks), with an estimated investment of Rs 4,000 crore.

In all, the government has signed 110 production-sharing contracts under the five rounds of NELP completed so far.