Shirish Nadkarni
OGJ Correspondent
MUMBAI, June 13 -- India's state-owned Oil & Natural Gas Corp. and privately held Reliance Industries are expected to be at the forefront of bidding for the 70 oil and gas exploration blocks to be offered in August in the seventh round under the New Exploration Licensing Policy (NELP-VII).
The bidding was originally to have been held in April, but was delayed due to the worldwide shortage of drilling rigs that made it difficult for companies to explore and exploit blocks already in their possession.
ONGC is already in talks with global energy giants like Petrobras of Brazil, ENI of Italy and the UK's British Gas and BP for the formation of a consortium for bidding for the blocks, set in 300,000 sq km, even as the Mukesh Ambani-led Reliance has virtually firmed up a front with Chevron of the US.
It will be recalled that, during NELP-VI, the government had offered 55 blocks, for which 36 companies from 17 countries had made 165 bids. ONGC had walked away with 24 of the most lucrative deepwater blocks, while Reliance had bagged seven.
BP, BG, ENI and Petrobras all have expertise in deepwater exploration, and ONGC has been repeatedly seeking their assistance in searching for hydrocarbon reserves in the deepwaters of India. It is keen on jointly developing Krishna-Godavari basin blocks in which there have been recent gas discoveries, by offering some of its equity holdings to its prospective partners.
While it holds 57.2% of the country's total hydrocarbon acreage and contributes 84% of India's domestic oil and gas production, ONGC has not had any startling discovery in recent years apart from the big gas trove in Krishna-Godavari, which is yet to be approved by the Directorate-General of Hydrocarbons.
NELP-VII is touted to be the final round of bidding under this policy, since the Indian government is planning to move to Open Acreage Licensing Policy (OALP), which gives companies a round-the-year window to pitch for oil and gas blocks of their choice.
This round is hence expected to witness fierce bidding for the blocks on offer. It will include three pre-NELP blocks in the Krishna-Godavari basin, which had been originally given to ONGC on nomination basis, and in which BG had been offered joint operatorship through international competitive bidding in 2005.
Other companies expected to fight fiercely for blocks include state-run gas distributor GAIL India Ltd., which is preparing to team up with midsize firms from Canada, the US, the UK and Australia; and Anil Ambani's Reliance Natural Resources Ltd., which has also sounded out some international firms.
