NEW DELHI Feb.8, 2007 (Dow Jones Newswires)
Petroleum exploration companies are likely to invest around $6 billion over the next few years into exploring for oil and natural gas in India following the award of 52 blocks under the latest licensing round.
A bulk of this investment is likely to come from the country's state-run energy companies, who cornered a large chunk of the 52 blocks that were awarded Thursday.
"Our conservative estimate is there would be investment totaling $6 billion in the blocks awarded of which $2 billion would be in first phase of exploration 2007-12," Petroleum and Natural Gas Secretary M.S.Srinivasan said Thursday after the federal cabinet approved awarding the blocks.
"Government went by bid evaluation criteria and their was equal opportunity and level playing field for all bidders," he said.
India got 165 bids for 52 of the 55 blocks it had put on offer. Oil and Natural Gas Corp. (500312.BY) or ONGC, which emerged victorious won five blocks on its own and 19 others as a leader of various consortiums with local and foreign players.
Most of the blocks ONGC won on its own are onshore.
Reliance Industries Ltd. (500325.BY) won rights to explore seven more blocks, all in the deepwater, on its own.
Australia's Santos Ltd. (STO.AU) won rights for two blocks, both deepwater, off India's eastern coast.
Among the other foreign companies which won partial rights include Cairn Energy (CLN.LN), Ukraine's Naftogaz, Geoglobal Resources (GGR), BG Exploration and Production India, the local unit of BG Group Plc.
The government hopes to sign production sharing contracts with the winners by the first week of March, said Srinivasan.
The government also plans to announce the seventh round of bidding for oil and gas exploration blocks in April.
The new round is also aimed at boosting stagnant oil and natural gas output.
India imports three quarters of its crude oil requirements and 40% of its demand for gas is unmet.
Copyright (c) 2007 Dow Jones & Company, Inc.
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