India to Launch Oil & Gas Block Auction Thursday

NEW DELHI Dec 10, 2007 (Dow Jones Newswires)

The Indian government plans to auction 57 domestic oil and gas blocks starting Dec. 13, Petroleum and Natural Gas Minister Murli Deora said Monday.

This will be the largest auction of oil and gas blocks by India, which imports almost three-fourth of the crude it processes, and is trying to boost indigenous production.

The government is also hoping to increase foreign participation, and Deora said steel and energy conglomerate L.N. Mittal group would likely bid for the first time in this auction, perhaps in partnership with another company.

On offer are 19 deepwater blocks, mostly on the west coast, nine shallow-water blocks and 29 inland blocks, a senior oil ministry official said.

The auction is likely to close on April 11, he said. Deora said the blocks will be allocated by July.

The Indian roadshow for the auction will be held in Mumbai on Jan. 8 followed by international roadshows in London, Houston, Calgary and Perth, among others, the official said.

Originally scheduled for March or April 2007, the auctions have been delayed due to controversy over the pricing of gas discovered by Reliance Industries Ltd. from a block awarded under a new licensing policy.

In the previous six rounds of auctions under the new policy, the government has awarded 162 oil and gas blocks, a majority of which have been snapped up by state-run explorer Oil and Natural Gas Corp. and private oil company Reliance Industries Ltd.

While the first few rounds of Indian auctions didn't attract many international bidders, the last round highlighted the growing interest of international companies in the country's exploration sector. About 36 foreign companies bid along with 32 Indian companies in the previous auction.

Some of the major players who have bid for Indian oil and gas blocks previously include BP PLC, Malaysia's Petroliam Nasional Bhd., or Petronas, BG Group PLC, Cairn Energy PLC, Santos Ltd. and ENI SpA.

Copyright (c) 2007 Dow Jones & Company, Inc.


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