Vedanta looks abroad to hire service providers
Aim is to award end-to-end tenders for OALP blocks to reduce production time
Cairn Oil & Gas, the hydrocarbon division of Vedanta, has kicked off a programme to hire global players for end-to-end operations of 41 of the 55 oil and gas exploration blocks that the Anil Agarwal-led firm bagged in the first round of open acreage auctions (OALP-1).
The move came after it failed to find enough experienced service providers in India owing to the short deadline for exploration of these blocks. Vedanta on November 29 had organised a partner meet at Houston, which saw participation of more than 200 specialists from over 50 endto-end service providers and niche technology companies. The company, which is likely to invest around $500 million in these 41 blocks, claimed it was getting positive responses from major service providers.
Vedanta is showcasing to global players that from owning five onshore blocks with probable reserves of about 1.3 billion barrels of oil equivalent (BBOe), Cairn has expanded its reach in India with new blocks — onshore and offshore — which add a target resource of close to 4.2 BBOe. The new assets are spread across states such as Andhra Pradesh, Assam, Tamil Nadu, Tripura, Himachal Pradesh, Uttar Pradesh, Arunachal Pradesh, Rajasthan, Maharashtra, and Gujarat.
A company source confirmed that Vedanta was engaged in strategic, longterm partnerships with global companies such as GE Baker Hughes, Halliburton, and Schlumberger. Sudhir Mathur, chief executive officer at Cairn Oil & Gas, had told Business Standard recently that the plan was to bring first oil from OALP blocks by 2022, while the directorate general of hydrocarbons (DGH) in an official statement had said it was expected by 2025.
“If Cairn is looking for endto-end operators, only GE Baker Hughes, Halliburton, and Schlumberger are capable of doing it globally. Already, their hands are full in India through having tie-ups with companies such as Oil and Natural Gas Corporation and Oil India. Hence, it needs to be seen if they will get interested in the offer put forward by Vedanta,” said an industry official, on condition of anonymity. Moreover, they have to follow strict global guidelines on security and anti-bribery activities.
When asked about the progress of its talks with service providers, a company official said: “We are at pre-bid meetings stage with service providers. The time period during which companies are
required to undertake exploration is typically five to eight years, the latter more so in the case of deep water exploration, which takes more time.”
The firm’s aim is to award end-to-end tenders for OALP blocks to reduce the time to production and maximise the potential of these blocks.
For interested players, there is a lot on Vedanta’s platter, including deployment of niche technical and operational capabilities across the entire value chain of the exploration and production lifecycle . The company is also
offering future collaborations with these firms in the upcoming OALP and Discovered Small Field rounds as well.
“The advantage with OALP is that companies will have to pay lesser penalty for non-performance — that includes $3 million for offshore areas and $ 1 million only for onshore. Hence, the pressure on companies will be less this time. The effort by Vedanta looking abroad for tie-ups and speed up exploration is encouraging for the government,” the industry source added.