New Delhi, Oct 12 (Inditop.com) India received bids for just 36 hydrocarbon blocks out of 70 on offer under the new round of auction, which the oil ministry admitted as being a “poor” response, with even Reliance Industries abstaining from a single bid.
The deadline for receiving bids for the eighth round of auction for oil and gas assets under what is called the new exploration licensing policy was noon Monday. The bids were opened at 1.30 p.m.
“We have one of the best production sharing contracts in the world. But wrong signals have gone resulting in what you say is a poor response,” said V.K. Sibal, the director general of hydrocarbons – the oil industry regulator.
“When you invite investment, the signals are what matter the most.”
Of the 70 blocks for oil and gas on offer, bids were received for 36 blocks. The interest in coal-bed methane blocks was proportionally higher with eight out of 10 blocks attracting bids.
Mukesh Ambani’s Reliance Industries, India’s largest private company that had won its bid for 60 percent of the acreage on offer at the previous round along with the state-run Oil and Natural Gas Corp, did not bid for any oil block in this round. It only bid for one coal-bed methane block.
Petroleum Secretary R.S. Pandey said the government would go for fresh round of auction — originally expected to attract $5 billion in investment if bids were made for all blocks — after making necessary changes in the process.
“You may think the number is somewhat less. But if you look at the performance of bidding throughout the world this year, given the economic downturn, we have done better than many,” Pandey said.
“The blocks are not going anywhere,” he said, adding: “We will talk to them (oil companies) again.”
Soon after the latest auction was announced, the Anil Dhirubhai Ambani group had accused the oil ministry of failing to attract foreign investment because of what it termed as flip-flop, partisan and non-transparent policies.
“Petroleum ministry’s open interference by curtailing marketing and pricing freedom is the single biggest reason for the lack of international investor interest,” Anil Ambani had charged in a letter to Prime Minister Manmohan Singh.
But Pandey countered by saying that not a single clause in pricing and marketing freedom had been altered for the eighth round and that the interest expressed for 36 blocks clearly showed that the response was for more than 50 percent.
Experts have also said that in the eight rounds of auctions, so far, none of the five top global majors, namely Exxon, Shell, Chevron, Statoil and Conoco Philips, participated with bids.
In the seventh round, only 20 percent of the blocks on offer attracted bids in spite of global crude prices topping $100 per barrel.
“This is primarily due to absence of a well-defined, transparent and consistent policy regime,” said J.P. Chalasani, chief executive of Anil Ambani group’s Reliance Power.
“Not even one of the top five international oil companies participated in the rounds.”
