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India, predicting $150 oil, is wooing Chevron, Exxon to explore for crude |
NEW DELHI/MUMBAI: India wants global companies including ExxonMobil Corp and Chevron Corp to explore for oil and gas in the South Asian nation on concern that crude prices may soar to $150 a barrel and curb record economic growth.
“We’re trying our best to get the oil majors to bid,” VK Sibal, director general of hydrocarbons, said in Mumbai yesterday at an event offering 57 oil and gas areas for auction.
India, Asia’s third-biggest oil consumer, is competing with countries such as Nigeria to attract global explorers to seek reserves as decades-old fields in North America and the North Sea begin to dry up.
India wants Chevron, Exxon and BP to bid for the first time as local companies don’t have the technology to search in deep waters and remote regions.
“The government has done all it can to make the bidding criteria attractive to deepwater operators,” said Giles Farrer, an analyst at UK-based Wood Mackenzie Consultants Ltd. “This is likely to promote more competition for deepwater acreage, where only Reliance, Santos and Oil & Natural Gas have won blocks in previous rounds.”
This auction, the seventh since the government first invited bids in 1999, was delayed twice last year, pushing back discoveries to reduce dependence on imports as oil prices soar.
India, the world’s fastest-growing major economy after China, depends on imports for 70% of its oil needs.
Oil gained 57% last year and reached a record $100.09 a barrel on January 3.
“In the next two to three years we expect prices to reach $150 a barrel,” oil secretary MS Srinivasan, the top bureaucrat in the ministry, said yesterday. “Given this scenario, we are putting in more efforts in our exploration and production.”
A boom in exploration tripled rig usage over the past four years, adding to a global shortage and causing delays in tapping petroleum reserves in Indian waters.
The cost of renting rigs has tripled since 2005 for contracts extending to 2012. The non-availability of rigs and concerns over the transparency of the bidding process were cited by Sibal last year as reasons for the auction delay.
India may extend the drilling schedules by three years for explorers that won areas in the previous auctions because of the rigs shortage, Srinivasan said.
We expect “exponential growth” in the number of bids to explore in India because of a transparent system, Sibal said. India opened a total 165 areas for exploration in the previous six rounds of bidding, which yielded 49 oil and gas finds, Sibal said. – Bloomberg |
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