Cairn and Premier sole foreign bidders for NELP-III

Vol 6, PW 15 (25 Sep 02) Exploration & Production

OUR APOLOGIES! We were wrong to predict that no foreign company would bid for NELP-III acreage on 28th August.

Cairn Energy and Premier Oil have saved the day for Shastri Bhawan. All the other bidders were Indian: ONGC, Reliance, GAIL, Gujarat Petroleum, Oil India and Indian Oil.

Yet the list of those that stayed away speaks volumes about the quality of acreage. British Gas, Shell, Talisman Energy, BP and Tullow Oil all examined data, but didn't bid, reinforcing the general impression that India offers unattractive acreage; that world class fiscal terms count for nothing unless accompanied by world class acreage.

"The prospectivity of Indian acreage is not very high," an ONGC source tells us. "That is the key factor for global companies, not just financial terms.

We have always said that Indian companies will have to run alone. There is no queue of international companies waiting to get into India." Cairn bid for the following three blocks: Shallow water offshore Andhra Pradesh: KG-OSN-2001/1 (area: 1,100 sq km) Shallow water offshore Andhra Pradesh: KG-OSN-2001/2 (area: 210 sq km) Onland Gujarat Cambay Basin: CB-ONN-2001/1 (area: 215 sq km) All these blocks are adjacent to existing Cairn blocks KG-OS/6 offshore Andhra and CB-OS/2 offshore Gujarat.

"These blocks will fill some of the gaps in our existing acreage," a Cairn source tells us. "Our strategy in India is to grow organically." Premier joins Indian Oil to bid for Tripura block AA-ONN-2001/1 (area: 3,010 sq km).

Premier's bid is in line with its growing focus on the northeast.