RIL, ONGC now up against LN Mittal for NELP blocks
Traditionally, RIL and ONGC square off against each other, fighting to win oil and gas exploration blocks under NELP. Challenges for India Inc's best
By Piyush Pandey, TNN |
MUMBAI: India’s biggest auction of acreage for exploration is going to be an exciting affair, thanks to the looming face-off between steel tycoon LN Mittal, Reliance Industries (RIL), the biggest private sector firm in the country, and state-owned oil giant ONGC.
Traditionally, RIL and ONGC square off against each other, fighting to win oil and gas exploration blocks under the government’s New Exploration Licensing Policy (NELP). The two have had the habit of cornering a bulk of blocks on offer in previous rounds. But this time, they face a strong, new competitor in Mr Mittal.
Buoyed by sky-high steel prices and the new-found confidence after bagging Arcelor, Mr Mittal is ready to battle for the black gold lying beneath the subcontinental shelf. As bureaucrats in the ministry of petroleum and natural gas scramble to put together data for round seven of the bids, there is a keen sense of anticipation and excitment. Mr Mittal’s billions, coupled with his aggressive tactics, add some zing to what otherwise would be a dull and boring affair.
The government is hoping to draw up to $3.5 billion from the auction of 57 oil and gas exploration blocks from domestic private and overseas groups. Overseas roadshows for the auction are scheduled to start on January 25,
and bids will close on April 11. Roadshows for domestic investors will begin on January 8.
Analysts said that all three companies have equal strength and expertise to emerge successful at the auction. Mr Mittal has money and the ability to negotiate and win, RIL has a successful track record and ONGC has a deep understanding of India’s hydrocarbon basins and their potential.
Mr Mittal is believed to be talking to India’s second-biggest state-owned refiner HPCL to jointly submit bids for the auction. “We had discussions with the Mittals to jointly pursue upstream opportunities in India as well as overseas,” said a senior HPCL official. Senior Mittal officials did not reply to email questionnaires on the issue.
ONGC chairman RS Sharma declined to offer any comments on ONGC’s partners for NELP VII bids, citing it to be a sensitive information.
“Every one is talking to every one. Nothing has firmed up. I can not disclose the name of my partners now,” said Mr Sharma. However, he also did not rule out the possibility of joining hands with Mr Mittal.
But senior ONGC sources told ET that ONGC was in talks with British major BG, ENI of Italy and Norwegian firm Norsk Hydro to bid for most of the offshore blocks. Petrochemical giant RIL is believed to be luring US majors Chevron Corporation and Exxon Mobil to bid for most of the deep-water blocks.
Traditionally, RIL and ONGC square off against each other, fighting to win oil and gas exploration blocks under the government’s New Exploration Licensing Policy (NELP). The two have had the habit of cornering a bulk of blocks on offer in previous rounds. But this time, they face a strong, new competitor in Mr Mittal.
Buoyed by sky-high steel prices and the new-found confidence after bagging Arcelor, Mr Mittal is ready to battle for the black gold lying beneath the subcontinental shelf. As bureaucrats in the ministry of petroleum and natural gas scramble to put together data for round seven of the bids, there is a keen sense of anticipation and excitment. Mr Mittal’s billions, coupled with his aggressive tactics, add some zing to what otherwise would be a dull and boring affair.
The government is hoping to draw up to $3.5 billion from the auction of 57 oil and gas exploration blocks from domestic private and overseas groups. Overseas roadshows for the auction are scheduled to start on January 25,
and bids will close on April 11. Roadshows for domestic investors will begin on January 8.
Analysts said that all three companies have equal strength and expertise to emerge successful at the auction. Mr Mittal has money and the ability to negotiate and win, RIL has a successful track record and ONGC has a deep understanding of India’s hydrocarbon basins and their potential.
ADVERTISEMENT
Mr Mittal’s interest in the energy sector is not new. He tied up with ONGC in 2005 to form two companies to bid for oil and gas blocks overseas. It is not clear if the agreement covered bidding for NELP rounds too. Mr Mittal is believed to be talking to India’s second-biggest state-owned refiner HPCL to jointly submit bids for the auction. “We had discussions with the Mittals to jointly pursue upstream opportunities in India as well as overseas,” said a senior HPCL official. Senior Mittal officials did not reply to email questionnaires on the issue.
ONGC chairman RS Sharma declined to offer any comments on ONGC’s partners for NELP VII bids, citing it to be a sensitive information.
“Every one is talking to every one. Nothing has firmed up. I can not disclose the name of my partners now,” said Mr Sharma. However, he also did not rule out the possibility of joining hands with Mr Mittal.
But senior ONGC sources told ET that ONGC was in talks with British major BG, ENI of Italy and Norwegian firm Norsk Hydro to bid for most of the offshore blocks. Petrochemical giant RIL is believed to be luring US majors Chevron Corporation and Exxon Mobil to bid for most of the deep-water blocks.
ADVERTISEMENT
RIL president for petroleum business PMS Prasad had earlier said that Reliance might bid jointly for the first time with BP, Exxon Mobil and Chevron for drilling rights in India in order to share rising exploration costs and gain expertise from its foreign peers.Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
