India may offer as many as 85 oil and gas areas in a seventh auction of exploration rights, V. K. Sibal, India’s director general of hydrocarbons, said.
India plans to call bids from overseas and Indian oil companies to explore for oil & gas in the areas at the end of this month, Sibal said in an interview in New Delhi on 3 March, 2007.
Record energy prices have spurred a search for reserves in India, where Reliance made the world’s biggest gas find of the year 2002. India is highlighting discoveries in the past four years and the rule of law to contrast with oil-producing nations that have seized output from overseas explorers.
“Overseas companies have been showing a keen interest in the terms offered by India,” said Ian Blakeley, a U.K.-based regional manager for South Asia at IHS Energy, which advises energy companies. “Interest in the new round will depend on whether India tweaks any of its terms and at what level oil prices are when the final bids come in,” Blakeley said.
India has been modifying the fiscal and contractual terms of its exploration contracts with every round of auction as part of India’s “learning of what works best”, he said.
India allows explorers to take their entire revenue from the sale of oil and gas, while Malaysia allows 87%, Indonesia 91%, the Philippines 87% and New Zealand 95%, V.K. Sibal, director general of hydrocarons, said in an interview on September 12.
The country’s oilfields have attracted overseas companies after successes by Edinburgh-based Cairn Energy Plc and India’s Reliance Industries Ltd.
As many as 34 overseas oil companies bid to drill in India, which offers fiscal benefits such as full cost recovery and tax breaks coupled with legal certainty, unlike Bolivia or Russia that have seized output from overseas explorers.
India announced the winners of the last round of auction for exploration rights on February 8. The bidders who won drilling rights in 52 areas signed those contracts in New Delhi today.
Oil & Natural Gas won the right to explore in 24 areas, Reliance Industries won seven areas and Oil India Ltd., a state-run explorer, won 8 areas.
The next auction will offer areas not explored before, Sibal said.
We will be including new areas, which we have never given out before, such as in northern India,” Sibal said.