Global oil giants tune into NELP-VII

MUMBAI: Showing keen interest in the seventh round of New Exploration Licensing Policy (NELP) bid, international oil and gas upstream companies, including US majors Exxon Mobil, Chevron Corporation, BP and Italian giant ENI have initiated talks with Indian state-run as well as private majors for forming consortia.

Leading executives of 28 overseas companies attended the first NELP roadshow in Mumbai on Tuesday. Around 145 company representatives attended the show for the sale of 57 oil and gas blocks.

Foreign oil companies had shown scant interest in the previous six rounds of NELP despite tremendous hard-selling by the Indian government. Wary of the increasing risk in the exploration game, foreign companies have preferred to either buy developed blocks or invest in countries where the prospects of striking hydrocarbons is higher.

Western oil companies have invested heavily in Gulf of Mexico, central Asia and Russia in the past few years. The government is hoping that the huge success enjoyed by Reliance Industries would spur increased interest in the offshore and onshore blocks offered by Indian companies.

On Tuesday, representatives of foreign oil companies expressed interest in investing in India, but did not elaborate. “Chevron is keen on increasing presence in India and is evaluating possible opportunities opened under Nelp. After identifying the blocks, which support our expectations, the company will finalise any tie-ups with Indian companies,” Chevron Petroleum India president John R Digby told ET.

Though he declined to comment on the possible partners, sources in the know confirmed that one of the possible allies would be RIL. British Gas (BG) India MD Kapil Garg said the company wanted to increase stake in emerging exploration and production business in India. The company has already begun talks with possible partners.

As ample time is left before the bid for NELP blocks, Mr Garg and his team are going through the seismic survey reports to select assets worthy of bidding. Italian major ENI has a tie-up with ONGC, Cairn and Oil India in the country. “We will consider going with our usual partners for Nelp bid. But nothing has been finalised as of now,” said general manager Franco Conticini.

The Canadian firm Epsilon is also considering a tie-up with Indian companies. Chief operating officer David Tkachuk said Indian assets have proved attractive after the major gas discoveries in KG Basin.

“NELP-VII is being offered in the backdrop of 49 oil and gas discoveries, which have already been made in 15 exploration blocks by accretion of in-place hydrocarbon reserves of more than 600 million tonne of oil equivalent,” petroleum minister Murli Deora said while inaugurating the roadshow.

Under the NELP regime, natural gas production in the KG basin is likely to begin from July 2008 at the rate of 40 MMSCMD with peak production of 80 MMSCMD. Other discoveries of ONGC and GSPC are also likely to come into production, establishing the deepwater expertise of Indian companies, said Mr Deora.

To facilitate data viewing by exploration and production companies, the government would also be opening data centres at Noida, Houston London, Calgary and Perth. The bid closing date for NELP-VII is April 11, 2008.