Oil, gas majors skip auction of small fields
The state-owned firms had initially indicated that they will bid for the fields, which were said to have been "surrendered" by them as they were commercially unviable under the price control regime. But new liberal fiscal terms had made these viable and the PSUs wanted to get them back.
The two however had not offered any bids by the time the round closed for the day and the reason offered was that since they had originally surrendered them, it did not make any sense to bid for these fields.
Sources said as many as 42 bids were received for 34 out of the 46 fields on offer, with Cairn India and Hindustan Oil Exploration Co (HOEC) being the major bidders alongside five smaller foreign firms.
BP plc, the biggest foreign investor in the oil and gas sector in India, as also Reliance Industries did not bid in the round that was also skipped by global energy giants like Exxon Mobil and Chevron.
Magna Energy too, the firm floated by maverick oil explorer Mike Watts who gave India its largest oilfield in Rajasthan, did not bid even though it was betting big on the country.
While Oil Minister Dharmendra Pradhan travelled the globe - from Singapore to Houston - to get investors for the first oil field auction round in over four years, big giants sat out primarily due to small size of acreage being offered and the overheads required to bring them to production.
Launching the auction round in May, Pradhan had stated that Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) would be able to bid for the fields on offer.
But the two firms were reportedly asked not to bid as private and foreign investors thought they would not be able to compete with the might of state-owned firms with inside knowledge of the fields.
As many as 67 idle discoveries, primarily of ONGC, were clubbed to form 46 fields for offer in the so-called Small Discovered Field round, bids for which closed today. Of these, 26 are on-land, 18 shallow water and 2 deepwater fields.
The fields hold an in-place reserves of 48 million tonnes of oil and over 38 billion cubic metres of gas reserves, worth Rs 70,000 crore at current prices.
Sources said the government took away these discoveries from ONGC as it could not develop them because of small size and unviable price.
But in the bidding round, the government is offering complete pricing freedom and liberal fiscal terms.
The fields offered included 28 discoveries in Mumbai offshore, 14 are in the prolific Krishna Godavari basin and 10 discoveries in the Assam shelf. .