New Delhi: The global economic meltdown and the gas dispute between the Ambani brothers may trip India’s largest ever auction of oil and gas blocks as the two factors are likely to keep major foreign firms from bidding, the sector regulator feels.
“I will be happy if we get an average of two bids per block,” said V K Sibal, Director General of Hydrocarbons, the upstream regulator that is conducting the eighth auction of blocks under New Exploration Licensing Policy (NELP).
Response to India’s offer of 70 blocks has been tepid with fewer prospective bidders visiting datarooms compared to previous rounds, he said. “The response in Canada, London and Perth has been lukewarm.”
“The global economic meltdown has adversely impacted smaller companies,” he said. Also, the public spat between billionaires Mukesh and Anil Ambani-run firms over gas from the nation’s largest field may have an adverse impact.
Fewer number of bids may come in for NELP-VIII due to “negative publicity because of the fight between two corporate giants,” he said. “Any fight between corporates has a negative impact. No fight has a positive impact.”
Anil-run RNRL is seeking to enforce a 2005 family agreement requiring elder brother Mukesh-headed Reliance Industries to supply natural gas from its KG-D6 field to a plant in Uttar Pradesh at a price 44% cheaper than a government-approved rate of $4.20 per mmBtu. The Supreme Court is to start final hearings on the matter from 20 October.