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Lloyds Lists: Oil giants seek ban on ONGC and Reliance in Indian round

Oil giants seek ban on ONGC and Reliance in Indian round

 

Aggressive bidding deters multinationals, writes Shirish Nadkarni in Mumbai
Lloyds List; Apr 20, 2006

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MULTINATIONAL oil giants Shell, Exxon and British Petroleum have sought a ban on bidding by India's state-run Oil ' Natural Gas Corp and the privately owned Reliance Industries for fresh oil and gas blocks tenders on the sub-continent.

Bids for the sixth round of India's New Exploration Licensing Policy are due in September 2006; and the Indian authorities have already held road shows in the world's major energy centres in March.

During one-on-one meetings with Indian politicians and bureaucrats at London and Houston road shows, the energy multinationals argued that ONGC and Reliance already had far too many Indian exploration blocks and must be kept out of the new round.

Most of the global oil giants stayed away from the previous five auctions due to aggressive bidding by the domestic majors.

However, NELP-VI has evoked considerable interest in the wake of major gas strikes by both Reliance and the ONGC-Cairn Energy combine in the Bay of Bengal. Cairn Energy also reported large oil finds in the north-western state of Rajasthan.

The multinationals said that a 'holiday' from bidding for fresh exploration blocks would also ensure that ONGC and Reliance concentrated on drilling their current blocks, rather than seeking time extensions due to paucity of equipment and manpower.

Industry sources said the multinationals felt threatened by the aggressive fiscal terms offered by the two Indian entities; thus the demand for their exclusion from NELP-VI.

The government-owned news agency Press Trust of India reported that more than Rs400m ($9.03m) worth of data had already been sold to companies worldwide.

This was far higher than the entire value of data sold during the earlier round, which fetched the government about half that figure.

Petroleum Minister Murli Deora, who led the road shows in London and Houston last month, had meetings with BP chief executive Lord Browne, Exxon Mobil chief executive Rex Tillerson, Shell International director Linda Cook and BG chief executive Robert Wilson. Representatives of other energy firms, including BHP, ConocoPhillips, Anadarko, Maersk, Repsol and Woodside, held discussions with other members of the Indian delegation.

– ONGC Videsh Ltd, the overseas arm of India's state-run Oil ' Natural Gas Corp, is in serious talks with Chinese oil major Sinopec to bid for the acquisition of onshore oil producing as well as exploration blocks in Colombia.

Sinopec recently beat OVL in its bid to acquire a 50% equity stake in Angola's Block 18 oil property. It proves that, in the oil and gas game, there are no permanent friends nor enemies.

OVL is keen on Project Amazon, the codename given to the plan of buying 50% or more equity in Ominex de Colombia, which produces around 9,450 barrels of oil per day. Net proven reserves of the producing blocks are around 157m barrels.

Ominex is believed to be interested in selling 100% interest in the blocks if the price is right. If OVL and Sinopec were to agree to bid jointly for the properties, it would mark the second time that the Indian entity and arch-rival Chinese firms would be teaming up to bid for an oil property.

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