India tapping newcomers to unlock $7b oil, gas assets

mumbai/new delhi — India approved awarding rights for 31 small discovered oil and gas fields in its first auction in six years, entrusting most of these to new entrants as it seeks to boost local production.

Sun Petrochemicals, a privately-owned company formed by the directors of drugmaker Sun Pharmaceuticals Industries, and engineering company Megha Engineering & Infrastructure were among 15 new entrants out of 22 firms that have received rights to develop the fields, according to a statement. Established players, including Hindustan Oil Exploration and state-run Oil India, also won some fields.

Development of these small oil and gas fields is crucial for Prime Minister Narendra Modi’s plan to reduce oil imports by as much as 10 per cent by 2022. The awarded blocks will boost India’s oil output by as much as 15,000 barrels a day and gas production by two million standard cubic metres a day, according to the Directorate-General of Hydrocarbons.

“These fields hold potential for lot of investments in India over the next decade,” DGH head Atanu Chakraborty said. “It will open new avenues for jobs and create entrepreneurs.”

The 46 fields that went under the hammer were discovered by Oil and Natural Gas Corp and Oil India with estimated in-place oil and gas reserves of about 625 million barrels. — Bloomberg