Monday, March 28, 2011

NELP-IX: ONGC bags 10 oil and gas blocks, Reliance 2,BG-BHP 1

NEW DELHI: State-owned Oil and Natural Gas Corp (ONGC) today bagged 10 of the 33 oil and gas exploration blocks that received bids at the close of the ninth licensing round, which saw a tepid response with global energy majors staying away.

ONGC, which had won almost two-third of the blocks offered in the previous New Exploration Licensing Policy(NELP) rounds, bid with firms like Oil India Ltd (OIL) for as many as 29 blocks and managed to get 10, official sources said.

After staying away from the previous auction in 2009 and bidding for just one area in the NELP-VII, Reliance Industries bid for two deepsea blocks in the Andaman Basin in the Bay of Bengal and four onshore blocks in Rajasthan and Gujarat.

Sources said Reliance was declared provisional winner of the two deep-sea areas.

The only other notable bidder was UK's BG Group, which teamed up with BHP Billiton to bid for a deep-water block in the Mumbai basin, off the West Coast. BG-BHP were declared winner of the block.

Essar Oil bagged the most contested block in the Cambay basin. The Gujarat onshore block, which received highest number of six bids, was the only one that Essar bid for.

Cairn India, whose success in Rajasthan may have prompted Reliance to bid for two blocks in the state, submitted offers for one onland and one offshore block, both of which it lost. Cairn did not bid for the blocks in Rajasthan.

Sources said ONGC and partners got five out of the eight deepwater blocks on offer. Reliance got two and BG-BHP one. While six out of seven blocks got bids, ONGC and partners managed five of them. OIL as operator got the sixth.

It was a small companies show in the 19 onland blocks with OIL managing to win just two. Essar was the only other notable winner while the rest went to lesser known companies.

Oil Minister S Jaipal Reddy said 74 bids were received for 33 out of 34 blocks offered in the ninth round of NELP, bids for which closed today.

Besides ONGC and OIL, other state firms dominating the bidding include gas utility GAIL India and the upstream subsidiary of Bharat Petroleum , which bid for four blocks.

"The response to this 9th round (of auction) under NELP has been more than satisfactory. It has been encouraging," Oil Minister S Jaipal Reddy told reporters here.

Reddy rejected arguments that regulatory troubles with London-listed mining group Vedanta Resources' buyout of Cairn India sent negative signals to investors.

"We have not taken a negative view of (to the USD 9.6 billion transaction), nor a positive view... we have maintained absolute neutrality," he said.

Vedanta had in August 2010 announced buying out of Cairn Energy Plc's majority stake in Cairn India, but the deal is yet to get the government approval. 

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Source : ET

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