Likely winners for six of the most sought after blocks

Vol 10, PW 11 (21 Sep 06) Exploration & Production

Independent inquiries by PETROWATCH since 15th September reveal the likely winners for six of the most fiercely contested blocks.

Our research is not scientific and is based on the consensus views of those that bid. Most bidders have done their own calculations of competing bids and can claim to have a fairly accurate idea of who will win which blocks.

Of the 52 blocks that received bids, onland Gujarat block CB-ONN-2004/3 received the most: ten. CB-ONN-2004/3 is an extension of ONGCs producing Gandhar oilfield; log data reveals definitive oil shows.

Rank outsider Naftogaz of Ukraine with Adani Group of Gujarat and Indian industrial group Welspun is the hot favourite. Naftogaz bid an aggressive work programme of 11 wells, 230-sq km 3D, 500-sq km geochemical surveys and 120-sq km satellite surveys.

It also bid an attractive fiscal package of 75% to the government in Tranche-1 and 65% in Tranche-2. Equally favourite is a consortium of ONGC, Gujarat Petroleum and Indian Oil and start-up company Ensearch International, which bid an aggressive fiscal package of 75% in both Tranche-1 and Tranche-2 plus very deep wells.

Onland KG block KG-ONN-2004/1 attracted nine bids. Most bidders believe Oil India and GeoGlobal Resources will win this block because of their aggressive fiscal package.

Oil India has bid with GeoGlobal for four blocks in this round and is confident it can win them all. Oil India has made a point of bidding very aggressive fiscal packages for all its blocks, we hear.

Cambay basin shallow offshore block CB-OSN-2004/1 also received nine bids. This block contains relinquished parts of Cairn Energys prolific CB-OS/2 block and its producing Lakshmi, Gauri and Ambe oil and gasfields.

Favourite to win here is a consortium of ONGC, Bharat and Hindustan Petroleum through a combination of an aggressive work programme and fiscal package. Another favourite is the Focus Energy (formerly Phoenix Resources) led consortium, which has bid 18 wells and 2616-sq km 3D.

Next in line is offshore Krishna Godavari block KG-OSN-2004/1, which received seven bids from companies tempted by the earlier successes of Cairn Energy. This block contains the relinquished shallow water portions of NELP-I block KG-DWN-98/2, where Cairn Energy discovered multi-tcf deposits before selling 90% and operatorship to ONGC and retaining just 10% for itself. Overwhelming consensus here is that the block will be won by ONGC in partnership with British Gas through their combination of a good work programme and an aggressive fiscal package. Seven bids were also received for block MZ-ONN-2004/1 in the tiny and intermittently violent northeastern Indian state of Mizoram on the border with Myanmar. This is the first time a block from Mizoram has been offered in a licensing round and interest in this particular block stems from reported oil seepages to the ground. Once again, Oil India, working in home territory, is expected to walk away with this block in partnership with GeoGlobal Resources of Canada because of a particularly aggressive work programme. Also with seven bidders is onland Cauvery block CY-ONN-2004/1. Here the likely winner is Jubilant with GAIL and Gujarat Petroleum through its bid of six wells and 84% cost recovery and profit petroleum for the government starting at 61% and tapering down to 9%. ONGC, BPCL have bid three wells, 50% cost recovery and profit petroleum starting at 52% going up to 73%.

Likely winners for six of the most sought after blocks

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