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Oil majors spurn Indian exploration round

India failed to attract oil majors in its latest exploration round because of the low success rate of oil strikes and other opportunities elsewhere, analysts and industry officials said on Friday.

"The roadshows were very successful but big firms have not turned up for NELP-II because of a lot of activity in the global arena," Dave Thompson, director (business development) at IHS Energy, said on the margins of an oil seminar.

IHS Energy was consultant to India's directorate general of hydrocarbons for promoting the country's second round of New Exploration Licensing Policy.

Thompson said around 68 licensing rounds were on offer when India's second round was announced. "India was in competition with everyone else to gain foreign funding."

India received bids from 13 firms for 23 of the 25 blocks which it put on offer under NELP-II.

An analyst with a British brokerage firm said India was "not a hot property" in the international market. "People who are keen have already shown their interest in previous rounds. Finding new players would be difficult. Only a big find can attract newcomers," he said.

India's last big find was Bombay High oilfield on the west coast which was discovered in the 1970s. The field accounted for 16.75 million tonnes of the 32.0 million (650,000 barrels per day) of crude India produced in 1999-2000 (April-March).

The six foreign firms which bid individually or with Indian firms were British firms Cairn Energy, Hardy Oil, Heramec Ltd, Canada's Niko Resources, Joshi Technologies of the US and state-run Petrom of Romania.

Bids were received for eight deep-water, eight offshore and seven onland blocks. India had offered eight deep-water blocks on the West coast, five shallow water on the East coast and three shallow water on the West coast and nine onland blocks.

The closing date for receiving the bids was March 31.

Bought data

India's director general for hydrocarbons said the petroleum unit of BHP Ltd, Pan Canadian, Premier Oil Plc and France's Elf Aquitaine bought seismic data for NELP-II but did not submit a bid.

"Our feedback is that they did not bid because of their internal analysis on global operations," Said Avinash Chandra.

An official of British oil explorer Cairn Energy said the firm's decision to bid for a solitary block in NELP-II was purely motivated by the firm's strategic interests.

"Cairn's philosophy is to look at high-grade opportunities we can pursue and of the blocks on offer we believe we found a number did not have the prospects that matched our interests," the official, who did not wish to be identified, told Reuters.

He said the firm had no problems with the licensing terms offered under the NELP. NELP, a key liberalisation plank of import-dependent India, offers tax holidays, duty-free import of capital goods, global prices for crude and lower royalty rates.

But Thompson said fiscal terms offered for taking deep-water exploration risks were "okay but could be improved". He said IHS Energy would soon submit to the DGH its recommendations on making India one of the key strategic areas. He gave no details.

Chandra said mergers and acquisitions among global oil firms have also reduced the number of players in the arena and their restructuring had resulted in a change in their priority to produce from existing and recently-acquired fields.

"Most of the merged companies were seen not working for new investment at least for a year and a half. But we hope to see them in the next round," he said.

Thompson said about 45 companies had been whittled to 16 conglomerates because of mergers and acquisitions. "There are so many less bidders, and mainly the active ones." Among the large consolidations were Exxon with Mobil and British Petroleum with Amoco.

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