PUTTING A BRAVE FACE ON THE NUMBERS
Indias Directorate General of Hydrocarbons (DGH), promoter of NELP, is relatively happy about the number of bids received.
Despite negative press on the quality of the acreage, the DGH stresses this round has received more bids than all past rounds. A source at the DGH tells this report it is also the first time that state-owned ONGC and Oil India are facing direct competition (albeit on a limited scale) from foreign oil companies - something which has never before happened in India.
The fact that Reliance put in the highest number of bids after ONGC is also a source of comfort. "Private Indian oil companies have come of age", Petrowatch is told, "This is the first time we are seeing real competition for ONGC in the exploration sector".
Also, a number of foreign multinationals are reported to have told the DGH that the reason for their absence has nothing to with the quality of the acreage. "They love our acreage", this report learns, "They decided not to bid for other reasons".
Among the reasons cited is the present wave of mergers and acquisitions and low oil prices earlier in the year which forced exploration budgets to be slashed. Arco, for example, despite spending close to a $1m on the purchase of deepwater NELP data, allegedly did not bid because of its takeover by BP/Amoco, and the resultant streamlining of the new companys international exploration activity.
However, it is difficult to establish if such reasons were given out of politeness or genuine sincerity. Ever optimistic, the DGH insists companies that did not bid can farm-in at a later date.
"The size of a (NELP) consortium can't be reduced, but it can be enriched", we learn.