Failing to woo foreign investors, nearly half of the 16 oil and gas exploration blocks awarded contracts on Wednesday under the ninth exploration licensing round have been won by state firms including ONGC, Oil India and GAIL.
The award of contracts that were announced on Wednesday were initially approved by the Cabinet last week, but details were pending. Contracts for 16 out of the 33 oil and gas blocks that were bid for in the ninth round of New Exploration Licensing Policy (NELP) were signed on Wednesday.
A total of $582.3 million has been committed in the 16 blocks that were awarded, petroleum secretary GC Chaturvedi said.
With a heavy dependance on imported oil and gas and its surging energy needs, India —Asia’s third-largest economy needs huge private capital to explore and produce oil and gas domestically.
But India has continuously failed to woo global players in its oil and gas exploration licensing rounds due to its dim track record of commercial discoveries and bureaucracy. Previous licensing rounds were also dominated by Indian state-run firms.
The foreign firms were hardly in evidence except Deep Energy, a subsidiary of the US-based Deep Industries, which in a consortium with other companies, secured operatorship of three onshore blocks.
Under the present round, the government had offered 34 areas — eight deepwater blocks, seven shallow water blocks, 11 on-land blocks, and 8 Type-S (or small) on-land blocks, in NELP-IX. Of these, bids were received for 33 on close of auction on March 28, 2011.
Chaturvedi said bids for seven deepsea blocks and three shallow water blocks were rejected as bidders offered “very low” profit share to the government.
ONGC got operating rights for four blocks, while a consortium led by Oil India won two. Gail India-led consortium that was awarded one onshore block in the Cambay basin. Other companies awarded blocks were Sankalp Oil and Natural Resources, which won three, while one block each was won by Focus Energy, Pratibha Oil and Natural Gas, and Pan India Consultants & Frost International Ltd.
India is currently producing around 763,000 barrels per day (bpd) of oil, mostly from fields awarded decades ago — less than a quarter of its 3.878 million bpd refining capacity.