India's government apparently is stepping up plans to privatize upstream oil operations in the wake of disappointing results from its fourth round of bidding for oil and gas exploration.
In a major departure from policy, the government has decided to allow foreign and private domestic companies to develop existing oil and gas fields.
Previously, that right was limited to India's state oil companies. The measure, targeted at development of small and medium size fields, is expected to bring in a sizable amount of foreign equity. Because no risk venture capital would be involved, as with exploration, the government would impose certain statutory levies.
A strong lobby within ONGC and the government favoring privatization of more of India's oil sector has evolved in the wake of a liberal new industrial policy.
NEELAM TARGETED?
Indications are that a project involving further development of Neelam offshore oil and gas field might also be offered to foreign multinational companies.
Indian government officials said proposals were received from Chevron Corp., Royal Dutch/Shell Group, and Total offering to participate in the fourth round if allowed to participate in development of existing discoveries.
State owned Oil & Natural Gas Commission earlier this year let a $560 million contract to Hyundai Heavy Industries Ltd. for a production/processing platform complex to be installed in Neelam field off Bombay (OGJ, Mar. 16, p. 28).
Neelam's further development would boost production to 130,000 b/d of crude and 92 MMcfd of gas from 10,000 b/d at present at a cost of $1.4 billion.
BIDDING ROUND RESULTS
India's government received 24 bids from 28 companies or groups for 13 blocks under the fourth bidding round.
Nine Indian and 19 foreign companies or groups submitted bids for five offshore and eight onshore blocks. The government had offered 39 offshore and 33 onshore blocks in the round.
Foreign bidders were Albion International Resources Inc., Amoco India Petroleum Co., Anadarko Petroleum Corp., ARCO India Inc., Baker & Taylor Drilling Inc., Coplex Resources Inc., Discovery International Inc., E Corp., Gas & Oil Management Inc., Indus Oil, Kyung In Energy Co., Lucky Goldstar International Corp., Oil International Ltd., Overseas Oil Exploration Co., Pan Energy Resources Inc., Pan Pacific Petroleum NL, Shama Zoe Partnership, Shell Exploration By, and Total.
Indian bidders were Arya Offshore Services Ltd., Hindustan Oil Exploration Co. Ltd., Hiralal L Shah (nonresident Indians), Jindal Drilling & Industries, Mafatlal Industries, Tata Industries, Rajalakshmi Mills Ltd., Rupsa Petroleum Ltd., and Trans Asia Consultants.
Blocks receiving bids were in these areas (see map, OGJ, Dec. 23, 1991, p. 30): three each in Rajasthan and Krishna-Godavari, two in Gujarat-Kutch, and one each in Cauvery and Bombay offshore areas and in Cachar, Gondwana, and West Bengal onshore areas.
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