New Delhi, October 01: The global economic meltdown and the gas dispute between the Ambani brothers may trip India’s largest ever auction of oil and gas
blocks as the two factors are likely to keep major foreign firms from bidding, the sector regulator feels.
“I will be happy if we get an average of two bids per block,” said V K Sibal, Director General of Hydrocarbons, the upstream regulator that is conducting the eighth auction of blocks under New Exploration Licensing Policy (NELP).
Response to India’s offer of 70 blocks has been tepid with fewer prospective bidders visiting datarooms compared to previous rounds, he said. “The response in Canada, London and Perth has been lukewarm.”
“The global economic meltdown has adversely impacted smaller companies,” he said. Also, the public spat between billionaires Mukesh and Anil Ambani-run firms over gas from the nation’s largest field may have an adverse impact.
Fewer number of bids may come in for NELP-VIII due to “negative publicity because of the fight between two corporate giants,” he said. “Any fight between corporates has a negative impact. No fight has a positive impact.”
Anil-run RNRL is seeking to enforce a 2005 family agreement requiring elder brother Mukesh-headed Reliance Industries to supply natural gas from its KG-D6 field to a plant in Uttar Pradesh at a price 44 per cent cheaper than a government-approved rate of USD 4.20 per mmBtu. The Supreme Court is to start final hearings on the matter from October 20.
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Alongside 70 oil and gas exploration areas, 10 coal bed methane (CBM) blocks are also on offer in a bid to attract a minimum of USD 3 billion investment. Bids close on October 12.
Though economic meltdown and Ambani gas dispute has resulted in less than enthusiastic response from foreign firms, Sibal said US energy majors Hess Corp and Nobel Corp besides BG Group and BP Plc of UK and BHP of Australia have shown inclination to bid.
Global majors as Exxon Mobil Corp, Chevron Corp and Royal Dutch Shell Plc are not participating in the Indian auctions because they want producing areas, he said.
Asia’s third-largest energy consumer, seeking to cut oil imports, received about USD 12 billion in work commitments and additional spending under the country’s first seven rounds.
Petroleum Secretary R S Pandey said the government has restored a seven-year income-tax holiday for gas projects to attract more explorers, changed a three-phase work programme to a single one offering companies more flexibility, and has specified the penalties for incomplete drilling commitments in the new exploration round.
“One is not sure if these incentives are going to remain in future (rounds),” he said calling on investors to bid.
India is offering 24 deep-sea blocks, 28 shallow water blocks and 18 onland blocks for bidding in NELP-VIII. Total investment of nearly USD 12 billion has been made on 203 blocks awarded under previous bidding rounds.
Bureau Report
New Delhi: The global economic meltdown and the gas dispute between the Ambani brothers may trip India’s largest ever auction of oil and gas blocks as the two factors are likely to keep major foreign firms from bidding, the sector regulator feels.
“I will be happy if we get an average of two bids per block,” said V K Sibal, Director General of Hydrocarbons, the upstream regulator that is conducting the eighth auction of blocks under New Exploration Licensing Policy (NELP).
Response to India’s offer of 70 blocks has been tepid with fewer prospective bidders visiting datarooms compared to previous rounds, he said. “The response in Canada, London and Perth has been lukewarm.”
“The global economic meltdown has adversely impacted smaller companies,” he said. Also, the public spat between billionaires Mukesh and Anil Ambani-run firms over gas from the nation’s largest field may have an adverse impact.
Fewer number of bids may come in for NELP-VIII due to “negative publicity because of the fight between two corporate giants,” he said. “Any fight between corporates has a negative impact. No fight has a positive impact.”
Anil-run RNRL is seeking to enforce a 2005 family agreement requiring elder brother Mukesh-headed Reliance Industries to supply natural gas from its KG-D6 field to a plant in Uttar Pradesh at a price 44 per cent cheaper than a government-approved rate of USD 4.20 per mmBtu. The Supreme Court is to start final hearings on the matter from October 20.
Related Stories
SC not to interfere with HC move to allow RIL plea
Alongside 70 oil and gas exploration areas, 10 coal bed methane (CBM) blocks are also on offer in a bid to attract a minimum of USD 3 billion investment. Bids close on October 12.
Though economic meltdown and Ambani gas dispute has resulted in less than enthusiastic response from foreign firms, Sibal said US energy majors Hess Corp and Nobel Corp besides BG Group and BP Plc of UK and BHP of Australia have shown inclination to bid.
Global majors as Exxon Mobil Corp, Chevron Corp and Royal Dutch Shell Plc are not participating in the Indian auctions because they want producing areas, he said.
Asia’s third-largest energy consumer, seeking to cut oil imports, received about USD 12 billion in work commitments and additional spending under the country’s first seven rounds.
Petroleum Secretary R S Pandey said the government has restored a seven-year income-tax holiday for gas projects to attract more explorers, changed a three-phase work programme to a single one offering companies more flexibility, and has specified the penalties for incomplete drilling commitments in the new exploration round.
“One is not sure if these incentives are going to remain in future (rounds),” he said calling on investors to bid.
India is offering 24 deep-sea blocks, 28 shallow water blocks and 18 onland blocks for bidding in NELP-VIII. Total investment of nearly USD 12 billion has been made on 203 blocks awarded under previous bidding rounds.
–Agencies