Manash Goswami and Archana Chaudhary, Bloomberg
India, Asia’s third-biggest oil consumer, offered a record number of areas for oil and gas exploration, to boost local supplies and lower dependence imported crude whose prices have surged to a record.
The government invited bids for 57 areas compared with 55 in the earlier round, V.K. Sibal, director-general of hydrocarbons, told reporters in New Delhi today. India will give preference to bids by companies that have deepwater exploration experience, the oil ministry said in a statement.
India wants Chevron Corp., BP Plc and Exxon Mobil Corp. to bid as local companies don’t have the technology to search for reserves in deep waters and remote regions. India is competing with Africa and South America to attract global oil companies to seek reserves and meet surging demand as decades-old fields in North America and the North Sea begin to dry up.
“The roadshows for the last couple of bidding rounds have created awareness and we could actually see more international companies bidding,” said Tony Regan, a consultant for U.S. Nexant Ltd., based in Singapore. “There’s been a lot of development over the last few years in Africa, South America and so there’s more areas, more countries. So, now India is having to compete and catch people’s interest.”
India opened a total 165 areas for exploration in the previous six rounds of bidding that started in 1999. BG Group Plc, the U.K.’s third-biggest natural gas producer, and Santos Ltd., Australia’s third-biggest oil and gas producer, are among the companies that won acreages in the last auction.
The offer included nine areas in shallow water, 19 in deep water and 29 onshore, the statement said. India set April 11 as the last date for receiving bids.
Record energy prices have spurred a search for reserves in India, where Reliance Industries Ltd., owner of the world’s third-biggest refinery, discovered the nation’s largest natural gas field in 2002. The field, slated to start production from next year, may double the nation’s supply of natural gas.
Reliance may bid jointly for the first time with BP Plc, Exxon Mobil Corp. and Chevron Corp. for drilling rights in India, to share rising exploration costs and gain the expertise of its foreign peers, P.M.S. Prasad, the company’s president for oil and gas, said in a June 8 interview.
Oil & Natural Gas Corp., the nation’s biggest explorer, on Aug. 31 signed an agreement with BP Plc, Europe’s second- largest oil company, to explore oil fields. The two companies are working on an area in the Kutch region, off India’s west coast, Chairman R.S. Sharma said on Oct. 12.
“What we are looking for is technology, especially in deep water exploration,” Sharma said on Oct. 12. “Companies such as BP have very advanced technology and expertise. We would like to work with them.”
San Ramon, California-based Chevron, which triggered the Saudi energy boom with the 1938 oil discovery in the kingdom, holds the record for deepwater exploration in the Gulf after boring the Knotty Head well to 30,589 feet beneath the sea floor in 2005. Exxon Mobil Corp.’s bid to break the record at its Blackbeard project last year fell 522 feet short.
Chevron, driller of the deepest-ever oil well in the Gulf of Mexico, is preparing to tow a $1 billion production platform into the Gulf to tap the Blind Faith oil field in 7,000 feet of water and more than 4 miles beneath the sea floor.
India delayed the offer of areas under the seventh round because of a shortage of rigs, platforms and contractors to build pipelines.
A boom in exploration in Asia’s fourth-biggest economy 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.