 "ONGC says Venezuela's PDVSA to supply oil")
After a six-year hiatus, the bidding for oil & gas blocks began on Monday with at least 42 companies submitting 134 bids for about 70 per cent area for the Discovered Small Fields Bid Round for oil and gas exploration in India.
Out of the 42 companies, more than 35 companies were new entrants to the sector. As the auctions closed at 12 pm on Monday, at least 134 bids were submitted for the fields on offer for the bidding that kicked off on May 25. Although the last date of submitting the bid was earlier slated as October 31, to give more time for small companies and private equity players to form joint venture, the government had extended it to November 21.
The government is hoping to attract start-ups and private equity players. Sixty-seven discovered small and marginal oil & gas fields under 46 contract areas have been put on auction. Out of these, 26 are on-land, 18 are shallow-water and two are deep fields.Major companies that submitted bids include state-run Indian Oil Corporation Ltd, Anil Agarwal-led Cairn India Ltd, Oil India, GAIL India, Bharat Petro Resources Ltd, Adani Welspun Exploration and Hindustan Oil Exploration Company. One of the richest people in India, Dilip Shanghvi of Sun Pharma too submitted a bid through Sun Petrochemicals and Subhash Chandra’s Essel Group also entered into the sector through Essel Group Middle East.
According to the Directorate General of Hydrocarbons (DGH), an arm of the petroleum and natural gas ministry that is conducting the bidding, the fields hold a reserve of 48 million tonnes of oil and 38 billion cubic metres of gas. The bidding process failed to grab interests from major global players even as state-run Oil and Natural Gas Corporation (ONGC) too decided to stay away from the ongoing auctions.
Out of the total 134 e-bids received, 120 e-bids were for onland areas and 14 e-bids were for offshore areas. As many as 42 companies (Individually or as member of the bidding consortium) have participated in the bidding round. For the current round, only five foreign companies showed up.
However, major players such as ONGC, Oil India, Reliance Industries, and BP skipped the auction. Thirty-four out of 46 oil & gas fields received bids.
The last round of auction under the New Exploration and Licensing Policy was conducted by the then United Progressive Alliance government in October 2010 when the crude oil price bench-marked to the Indian basket was $81 a barrel. The 47 contract areas carved out of 67 oil & gas fields on auction are discovered small fields taken out of the kitty of ONGC.
The discovered small field policy provides for uniform licence for exploration and production of all forms of hydrocarbon, easy-to-administer revenue-sharing model, and marketing & pricing freedom for the crude oil and natural gas produced. Further, the contractor will have the rights for exploration throughout the contract period.
On October 19, the DGH had organised a match-making event to bring capital providers, technology providers and oilfield service providers on one platform so that they can jointly bid for these fields. The government has conducted roadshows in the US, the UK, Singapore and West Asia. Twelve firms in the oil & gas service sector have purchased data about the blocks.
According to norms, companies that win onshore fields must start production within three years, while those that win shallow water and deep water blocks must start production in four and six years, respectively.
“Despite smaller contract areas on offer in the DSF Bid Round, the response from private companies was overwhelming; around 37 private sector players submitted e-bids as against 27 private companies, during the NELP-IX,” petroleum ministry said in a statement. All the 26 onland contract area received e-bids while 8 out of 20 offshore contract areas have received e-bids.
