Expect poor response for 27 NELP-III blocks

Vol 6, PW 13 (28 Aug 02) People & Policy

WHEN THIS ISSUE reaches your desk, Shastri Bhawan will be rushing to meet the 28th August bid deadline for 27 blocks on offer under NELP-III.

Sadly, oil minister Ram Naik will not have much to show, despite the best efforts of consultants Schlumberger and roadshows in Singapore, London, Houston and Calgary, or the smart move of asking Cairn Energy and BG to accompany the roadshows and endorse the positive business environment in India. No doubt the financial terms under NELP are some of the best in the world, but that alone is not enough to pull in foreign investors: the general perception remains that India offers poor quality acreage.

It is too early to reveal the block-wise bids but we can say one thing for sure: only two foreign companies are likely to bid, Cairn Energy and Premier Oil. British Gas will not bid because it wants to invest in other global exploration rounds.

But gossip has it the real reason is because of Shastri Bhawan's "unfriendly attitude" over the Panna-Mukta-Tapti operatorship issue. BHP Billiton, Statoil, Amerada Hess, Unocal and Talisman Energy are some of the companies that came and viewed the blocks but have decided not to bid.

Luckily, domestic private companies will be present in fair numbers, thanks to some good "organising" by oil ministry bureaucrats towards the close of 28th August. Some familiar names will appear when the list of bidders is published: Reliance, HOEC, GSPC, ONGC, Oil India, GAIL and Indian Oil.

Which blocks are attracting most interest Two in Gujarat; two small shallow-water blocks in the Krishna Godavari; and one each in Tripura and Assam.

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