Vedanta bids for all oil blocks on offer
Nine companies, including private players Vedanta, Sun Petrochemicals, Hindustan Oil Exploration Company and Selan Exploration Technology, have submitted bids in the first round of oil and gas auctions under the open acreage licensing policy (OALP).
The government has received a total of 110 electronic bids, while Vedanta has submitted bids for all the 55 blocks on offer.
Global energy giants like
BP, ExxonMobil, ConocoPhillips and Chevron stayed away from the bidding, and the current round was also marked by the absence of Reliance Industries.
Public sector companies that submitted bids include Oil and Natural Gas Corp (ONGC), Oil India, Gail India, Indian Oil Corporation (IOC) and Bharat PetroResources (BPRL).
Of the 110 bids received, 92 were for on-land blocks and 18 were for offshore blocks, the Directorate General of Hydrocarbons (DGH) said in a statement today.
"Although oil is on the boil right now, super majors and other international players are cautious about the mediumto long-term prospects of oil, due to the impact of increasing adoption of electric vehicles and falling solar photovoltaic cell prices. Not surprising that they are not keen to expand exploration to newer geographies," said Debasish Mishra, partner at Deloitte Touche Tohmatsu India.
According to industry experts, geological and regulatory challenges would have also discouraged global giants from participating in the upstream sector, even though most of them are upbeat about the retail market in India.
Today, the technical bids were opened at the DGH office in Noida in the presence of the bidders.
Among the blocks on offer CB-ONHP-2017/11 and CBONHP-2017/12 — both in Gujarat — received the maximum number of three bids each. According to sources, the government is planning to award the blocks by June 2018, after evaluation of bids. The final decision to award the blocks will be taken by an empowered group of secretaries and ministers, after the opening of commercial bids. Apart from Vedanta's interest through its oil and gas arm Cairn India, the round failed to attract any major player with considerable interests in oil and gas. For two blocks in Rajasthan and Gujarat Vedanta was the sole bidder. The other highlight of this round is the entry of Dilip Shanghvi, founder of Sun Pharmaceuticals, through Sun Petrochemicals, in which he has personal investments. "We are delighted to have participated in the very first round under OALP. We hope to enhance the quality of our portfolio and further strengthen our position as a leading independent oil and company in the Northeast region," said P Elango, chief executive officer of Hindustan Oil Exploration Company (HOEC). HOEC is the largest private sector producer in the North-east. On the other hand, Selan already has investments in five oil fields in Gujarat: Ognaj, Karjisan, Bakrol, Indrora and Lohar.
"At Vedanta Cairn Oil & Gas, we have been and remain bullish about the E&P potential in India and have put our best foot forward in the bidding process. As an industry, we hope that this bidding round brings substantial investments and new players to the country. This will accelerate much-needed exploration efforts and ultimately domestic production," said Sudhir Mathur, CEO, Vedanta Cairn Oil & Gas.
The 55 blocks are spread across 10 sedimentary basins covering an area of 60,000 sq km. The blocks are in AssamArakan (19), Mumbai Offshore (2), Cambay (11), Rajasthan (9), Krishna Godavari (5), Cauvery (3), Kutch (2), Saurashtra (2) and one each in the Himalayan foreland and Ganga basins.