Reliance-Niko (Canada) combine bags 12 of the 25 offshore blocks
Reliance Industries in association with Niko Resources of Canada has bagged 12 offshore blocks out of the 25 offshore blocks in the first round of bidding since the New Exploration and Licensing Policy (NELP) was announced. The company was a sole bidder for 4 of the 12 blocks awarded to it.
India’s premier oil exploration company Oil and Natural Gas Corporation (ONGC) bagged 8 offshore blocks, of which three were in association in its partners, the Indian Oil Corporation (IOC) and the Gas Authority of India (GAIL).
It is vital for India’s economic growth that it does everything to maximise the potential of doemestic oil production. (At present, the country produces around 35 million tonnes per annum of crude as against a demand of around 90 million tonnes of petroleum products.) To achieve this the most capable exploration and production ( E & P) companies should be attracted to India, which in turn means establishing fiscal terms and efficient administrative arrangements which are equal of any other oil province.
The new NELP was brought out at a time when the oil prices were at rock bottom and E & P companies were struggling to bring down costs. Hence the disinterest in investing in India’s untested waters.
This was also suggestive of India’s lack of a deep water find, poor quality of geological and geophysical data, delays in awards, contract negotiations and finalisation of contracts that deter bidders.
There is also a wide spread perception that government does not put out better blocks on offer for exploration and the more prospective ones are reserved for the ONGC. The government should make efforts to correct this perception.
As far as Reliance Petroleum is concerned it will benefit immensely since it will have access to in house crude if the offshore blocks turn out to be of good quality. Normally the crude output is split between the partners in a fixed ratio. The Reliance group already has an alliance with Enron and ONGC for drilling of the Tapti oil basin.
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