India woos global firms in oil asset auction

India woos global firms in oil asset auction

NEW DELHI: India launched its biggest ever auction of oil and gas assets on Thursday, its first under new rules designed to attract global firms capable of hiking domestic output and trimming the need for costly imports.

India is wooing private capital for exploration, and encouraging local firms to buy stakes in foreign oil and gas projects to meet the surging energy needs of Asia's third-largest economy.

"In the previous rounds, companies like ExxonMobil, Chevron and BP didn't participate," Oil Minister Murli Deora said at a press conference to launch the licencing round.

"I hope they don't make the same mistake again ... India has shown it has good prospects through recent discoveries." M S Srinivasan, the oil secretary, said the country hopes to draw somewhere between $3 billion and $3.5 billion for the 57 blocks that will go under the hammer.

Indian firms bidding in partnership with global majors with the technology and experience to develop tricky deepwater blocks will get additional marks when bids are evaluated, Deora said. Bids will close on April 11 and overseas roadshows will begin on January 25.

This is the seventh round of India's New Exploration and Licencing Policy launched in 1999, and Srinivasan said India had roped in $8 billion for exploration at the previous auctions. Of this $4.5 billion to $5 billion had already been invested.

This time round the assets on offer include nine shallow water blocks, 19 deepwater ones and 29 onshore areas. To attract new players without technical expertise, India has offered small onland blocks covering an area of up to 200 sq km.

India, Asia's third-largest oil consumer, buys 70 percent of its crude and is keen to reduce its dependence on imports. Previous rounds of NELP have been dominated by local firms with state-run explorer Oil and Natural Gas Corp bagging 74 blocks from a total of 162 awarded, and Deora said only 49 discoveries have been made, underlining the need for international expertise.

India's top listed firm Reliance Industries has topped the list of discoveries with a massive gas find off the country's east coast which it hopes to bring on stream by the middle of 2008.

Steel tycoon Lakshmi Mittal is set to add to his growing haul of Indian energy assets with bids for some blocks, Deora told reporters earlier this week. British major BP has said it may bid for some of the deepwater blocks on offer as it has the desired technology and experience.