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PSUs again dominate ninth exploration licensing round

29 Mar 2012 Evaluate

Public sector companies again dominated the ninth round of oil and gas acreages auction. ONGC got operating rights for four blocks, while a consortium led by Oil India won two blocks. Gail India led a consortium that was awarded one onshore block in the Cambay basin.

Under the ninth bid round of New Exploration Licensing Policy (NELP-IX), the government had received bids for 33 blocks out of 34 offered. Though private sector companies like Reliance Industries and Cairn India had put in their bids but they were unable to cash in.

Other companies awarded blocks in the ninth round were Sankalp Oil and Natural Resources, which won three, while one block each was won by Focus Energy, Pratibha Oil and Natural Gas, Pan India Consultants & Frost International, and Deep Energy, a subsidiary of Deep Industries which is based in the United States, in a consortium with other companies has got operatorship of three onshore blocks.

The winning of a majority of blocks by PSUs is not surprising as the process saw little participation from foreign companies. India is the world's fourth-largest oil importer and ships in 80% of its oil needs. Given the increasing demand for energy in the country, the government has been trying to woo foreign players. However foreign companies have been shying away from the Indian markets due to its poor track record of commercial discoveries and sluggish bureaucracy. The previous two licensing rounds were also dominated by Indian state-run firms.

On the 10th round of auction, Oil Minister Jaipal Reddy said, India will continue auctioning oil and gas blocks but won't switch to a new process of accepting bids for exploratory blocks at any time due to data-related issues. Unless we have a national data repository, we can't go in for open-acreage licensing. By adding more he said, ‘we want to go in for the 10th round as quickly as possible.’

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