State-owned Oil and Natural Gas Corp (ONGC) cornered six blocks – four as operator and two as minority partner — out of the 16 areas that the government awarded for oil and gas exploration,but saw its bids rejected for 8 areas including five deep-sea blocks.
Contracts for 16 out of the 33 oil and gas blocks that were bid for in the ninth round of New Exploration Licensing Policy (NELP) were signed today.
The government had offered 34 areas — eight deepwater blocks,seven shallow water blocks,11 on-land blocks,and 8 Type-S (or small) on-land blocks,in NELP-IX. Of these,bids were received for 33 on close of auction on March 28,2011.
Oil Secretary G C Chaturvedi said bids for seven deep sea blocks and three shallow water blocks were rejected as bidders offered “very low” profit share to the government.
ONGC ranked number one in eight of these blocks and Reliance Industries top scored in the remaining two areas but the bids were rejected as profit petroleum offered was less than benchmark 15 per cent.
Chaturvedi said award of five onland and two shallow water blocks to companies like Essar Oil,Deep Energy and Chinar Commerce Pvt Ltd was put-off due to bidders not meeting eligibility criteria.
A total of USD 582.29 million has been committed in the 16 blocks that were awarded,he said.
ONGC got operating rights for four blocks — one alone and three as part of a group — while a consortium led by Oil India won two blocks. Gail India led a consortium was awarded one onshore block in the Cambay basin.
Deep Energy,a subsidiary of US-based Deep Industries,won three onshore areas and Sankalp Oil and Natural Resources three areas each. Focus Energy,Pratibha Oil and Natural Gas and Pan India Consultants got one onland block each.
In the previous eight rounds of NELP,235 blocks have been awarded so far.
RIL,which had bid for six out of the 34 areas offered in NELP-IX,was ranked number one for the Andaman deepsea blocks,AN-DWN-2010/3 and AN-DWN-2010/4,ahead of a consortia of ONGC and Oil India Ltd.
But 10.95 per cent profit share offered by RIL was less than benchmark 15 per cent and therefore was deemed very low.
Similar was the view for ONGC’s 6.7 per cent profit share offer for two other Andaman Sea block – AN-DWN-2010/1 and AN-DWN-2010/2,where it was the sole bidder.
Bid by a consortium of ONGC-OIL and GAIL for deepsea block GS-DWN-2010/1 and that of ONGC-OIL-BPRL for Kerala-Konkan deepwater block KK-DWN-2010/1 was also rejected as they offered very low profit share.