GAIL (India) Ltd is looking to partner with small and medium-sized foreign companies to bid for exploration blocks in India’s seventh round of the same, under the new exploration licensing policy (Nelp), even as it plans to take stakes in hydrocarbon blocks in Australia.
While GAIL has the financial muscle to make the bids, analysts maintain that it lacks the requisite technical expertise, which is something it can tap from the smaller foreign firms.
GAIL plans to partner with only those companies that are exclusively in the hydrocarbon exploration and production (E&P) space, and will spend Rs500 crore this year on oil and natural gas exploration.
“We are in talks with small and medium E&P companies from Canada, United States, United Kingdom and Australia to partner for Nelp-VII. We are looking forward to the next round and are very interested in participating,” said a senior GAIL executive who did not wish to be named. He declined to name the companies.
GAIL is also looking at acquiring stakes in gas blocks overseas, from where the evacuation of gas is possible. “Australia provides a good environment to do business in,” said another Gail executive who did not wish to be named. GAIL currently has 30 hydrocarbon blocks in its E&P portfolio.
The government plans to offer 70 blocks covering around 3 lakh sq.km in the seventh round of Nelp. Indian firms have frantically begun negotiating for partners even before the rounds are announced.
GAIL has lined up capital expenditure of Rs25,000 crore by 2012. While Rs10,000 crore will be funded through internal resources, the balance will come from borrowings.