Indian oil reserves auction

In this article we want to highlight India as a potential oil producing country with world class refineries in place. It will not be surprising in 3 to 5 years India may be respected or consulted in deciding the international crude and refined oil fraction prices. Therefore we have taken the recent global auction by GOI as a practical example to highlight the nature of bidders, their business size and reputation in the international scenario.

Global energy giants British Gas, British Petroleum, Italy’s ENI and Malaysia’s Petronas are among the 66 firms that have bid for exploration acreages offered by the Government of India (GOI) in the sixth round of auctions encouraging more bidders.

GOI have received 165 bids for 52 blocks. A total of 66 companies including 35 foreign firms, have bid said an additional secretary in the oil ministry on the closing day for the auction. The concerned Minister has indicated that the government could expect $8-10 billion of cumulative investments in all the three exploration phases and at least $2 billion investment could be expected in the first phase.

State-owned Oil and Natural Gas Corporation bid for 45 blocks, which is the highest by a single entity. Mukesh Ambani-controlled Reliance industries bid for 21, while Anil Dhirubhai Ambani Group firm, Reliance Natural Resources, tied up with Ukraine’s Naftogaz bid for nine blocks and with PGNIG of Poland for another three blocks.

Reliance Industries bid for 17 deep sea blocks each in shallow water and on land. Contrary to reports, it went alone except in one Mahanadi basin deep sea block where it took state-owned Oil India Ltd as partner. However, super majors Chevron, Exxon Mobil and Conoco Philips of the U.S who were expected to partner Reliance industries, did not participate at all.

BP bid for two Mahanadi basin deep-sea blocks with ONGC, while ENI was lead partner in two deep sea blocks one shallow offshore and two on land blocks. Malaysia’s Petronas bid for one shallow water block in Krishna-Godavari basin. UK’s Cairn Energy made leads bids for seven blocks on its own and was junior partner in five others. BG was the lead bidder in the consortium that included ONGC and Coal India for three deep sea and one shallow water block and partnered ONGC and others in 10 deep sea blocks, two shallow water offshore blocks and 18 on land blocks.

The bids would be evaluated by November 15 and contracts signed there after within 2 months.

The summary of the bids is:

52 bids were received for 24 deepwater blocks, 25 bids for six shallow offshore blocks and 89 bids for 25 on land blocks. Of the 55 blocks on offer, two deep sea blocks in the Kerala-Konkan basin and one in Andaman Sea did not receive any bid. The ONGC-led consortium was the sole bidder in four deep sea, oneshallow water and two on land blocks, while Essar Oil was the sole bidder, in two on land blocks in the Assam-Arakan basin.

Essar Oil put in the third-highest bids after ONGC and Reliance, with interest in 15 blocks. Gujarat State Petroleum Corporation was the lead bidder in six blocks with partners ranging from GAIL, HPCL, BPCL, OIL to Petrogas.

Hindustan Oil Exploration Co also bid for six blocks. Other companies which bid include Assam Co Ltd (2 blocks) Adani port Infrastructure (4), Beach Petroleum (2), Canoro resources of Canada (1), EOG Resources (1), Geoglobal resources(1), IOC (2), Jubiland Oil and Gas (2), Joshi technology (1), M3nergy Berhad (1), Pan Orient (3), Petrogas (3), Prize petroleum (1), Premier Oil of UK (1).

The efforts and liberal gesture of the GOI to place India on the world energy map have paid rich dividends which could be seen from the overwhelming response of so many above mentioned bidders of repute.