All eyes on D5 in the Krishna Godavari deepwater

Vol 3, PW 18 (29 Sep 99) Exploration & Production

The biggest prize of this licensing round is undoubtedly the D5 deepwater concession adjacent to the Ravva field operated by Cairn Energy in the Krishna Godavari.

Four consortia have bid for this block (KG-DWN-98/3), the highest number of bids for a single concession. They are: ONGC with GAIL and IOC; Cairn Energy alone; Reliance with Niko Resources; and Enron Oil and Gas alone.

Information gleaned by this report on a strict condition of anonymity from a non-DGH source suggests that Cairn Energy and Reliance Petroleum are leading in the race to win it, with both receiving glowing recommendations from the DGH. By contrast Enron Oil & Gas and ONGC can count themselves out of the race.

The biggest surprise is the excellent quality of bids submitted by Reliance Petroleum, not just for D5, but for all its 14 bids. One observer closely following developments at the DGH notes that Reliance, "will reap a bonanza from this round".

The challenge for Reliance after the round will be to deflect inevitable criticism that it obtained its awards - if indeed it wins them - by underhand means. On D5 specifically, this report is told clearly: "Do not under-estimate Cairn Energy!".

As for Enron, which bid only for D5, the general feeling - rightly or wrongly - appears to be that, "they (Enron) were not really serious about their bid, it shows clearly". Similarly ONGC is likely to be disappointed with the result of the evaluations carried out by the DGH.

"I know ONGC. I know how the organisation works.

They wont be happy with the result". In the words of one DGH representative quoted in this report some weeks ago: "Indias private companies have come of age".