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The Times: Oil firms pile into bidding for rights in India

September 06, 2006
By David Robertson
 
THE world’s big oil companies are “going crazy” bidding for the rights to explore in India for the first time. Companies have ten days to submit bids on fifty-five exploration blocs around India in one of the largest oil and gas auctions.

The Indian Government is hoping that these Western companies will invest about $7 billion (£3.7 billion) exploring for oil and gas in these areas, which cover a total area of 30,000 square kilometres. 
 
With oil prices near record highs and companies struggling to find new reserves, the interest in the Indian auction has been intense. All the world’s leading oil companies are understood to be bidding and, if they win, it will be the first time that ExxonMobil, BP and ChevronTexaco have undertaken exploration in India.

Shell is expected to bid, despite pulling out of India in 2004, when it sold the last of its assets to Cairn Energy.

About 28 of the 43 companies that have registered an interest with the Indian Government are foreign. Interest has been so high that the Government has raised 700 million rupees (£8 million) selling the information packs. When India sold its last batch of exploration licences in 2004 most of the bidders were either Indian or small Western companies.

Cairn Energy, the British oil explorer, said that it would be bidding in the new round and that bidding had “gone crazy”.

India is not considered a leading oil and gas region, and its natural resources have not been developed, partly because foreign companies have been put off by its bureaucracy. Now the Indian Government is making it easier for Western companies to invest because the rapidly growing country is desperate for more energy reserves.

An oil well drilled by Chevron in the Gulf of Mexico could boost America’s domestic oil reserves by tens of billions of barrels. Chevron said that the Jack 2 well, 270 miles southwest of New Orleans, had flowed at a rate of 6,000 barrels per day in a production test.
 

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