Govt panel says no to NELP bids rejection
The Director General of Hydrocarbon’s (DGH) recommendation to reject at least 16 bids of oil major ONGC in the NELP-VI round on the basis of the company’s "poor past performance" has come a cropper.
By TNN |
NEW DELHI: The Director General of Hydrocarbon’s (DGH) recommendation to reject at least 16 bids of oil major ONGC in the NELP-VI round on the basis of the company’s "poor past performance" has come a cropper.
The empowered committee of secretaries (ECS) has decided to overrule the DGH’s observation. Instead, it has recommended that blocks be awarded on the basis of the highest bid criteria, provided the bidder qualifies on all other counts.
It now appears that ONGC may end up bagging as many as 24 blocks, of which bids for 16 were rejected by DGH. ONGC emerged as the top bidder for 12 deep water and four on-land blocks.
Reliance Industries, which has made the largest number of discoveries in the past few years, too is understood to have secured seven blocks, all in the deepwater Krishna-Godavari (KG) basin, which is being referred to as the North Sea of India.
Petroleum ministry sources said ECS turned down DGH's suggestion on the award of 12 deep water blocks as the regulator had failed to spell out the criteria for evaluating "past performance" to the bidders before the submission of bids.
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The recommendation against awarding four on-land blocks to ONGC has been found irrational, government sources said. There has been no takers for DGH's argument that the four blocks being small in size could be done more justice by medium-and-small-sized companies, which would bring expertise to these blocks."Bids’ evaluation criteria (BEC) does not provide for such a contingency," an official clarified. Interestingly, DGH overlooked the fact that GSPC, the Gujarat-based successful medium-sized exploration & production company, is a major stake holder in the ONGC-led bidding consortium for all the four blocks, sources said.
An ONGC official said that the evaluation criterion of "past performance" was not made explicit at the time of submitting bids. Other bidders also agreed with ONGC in this regard. DGH, however, said that the clause pertaining to the past performance of a company has been a part of the notice inviting offers (NIO) for a long time, and it has "given due consideration to the clause" only this time.
"It may be mentioned that this clause had been present in the past rounds as well, but had not been invoked in our decision making," DGH said in its recommendations to the government. It is expected that ECS may recommend the Cabinet Committee on Economic Affairs (CCEA) to award 24 blocks (12 deep water, two shallow water and 10 onland blocks) to ONGC.
Reliance Industries is understood to get seven deep water blocks, while Australia’s Santos is likely to be awarded two deep water blocks. “The blocks are likely to be awarded to successful bidders as soon as the Cabinet gives its clearance," an official said. It is expected that blocks will be awarded by the middle of December ’06.
It is understood that ECS has accepted the recommendation of DGH for rejecting 14 bids submitted by Essar Oil, Niko Resources, Finder, Tap Oil and M3Nergy for 14 blocks as they did not meet the technical requirements.
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