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Oil majors dip their toes in Indian waters

September 16, 2006 04:45 IST

Despite the United States oil majors staying away from the oil blocks bids under NELP VI, three of the six top oil companies -- British Gas, France's Total and Italy's ENI -- have dipped their toes into Indian waters, and analysts think it a 'significantly positive' sign.

Contrary to expectations, Exxon Mobil, Chevron and Conoco Phillips stayed away from the bidding despite buying data. 'This should not be construed as a lack of interest or potential,' stressed Director General of Hydrocarbons Vinay Kumar Sibal.

Explaining their absence, he said, 'Exxon and Chevron were looking for more geological data than we had circulated and therefore, they stayed away from the bidding despite their initial interest.'

Conoco Phillips, he indicated, underwent a management change at the last moment and that kept it away from the bidding.

Sources, however, said the three companies stayed away as they were unable to finalise partners.

Industry watchers said interest in the current round of bidding stemmed from the recent discoveries of oil and gas by private companies like Reliance Industries Limited and Scottish firm Cairn Energy. While RIL reported the country's largest gas find in the Krishna Godavari basin, Cairn has struck oil in Rajasthan.

Industry watchers added that given the recent discoveries, global oil companies were realising that the Indian oil and gas sector was under-invested and under-explored.

Companies that won rights to explore in the previous five NELP rounds have discovered the equivalent of 4.88 billion barrels of oil.

Another reason for the huge interest shown in Indian sediments is the overdependence on West Asian countries as a source of hydrocarbons. "Given the political instability in the area, there is a move among oil majors to look for safer sources," said an analyst.
Gayatri Ramanathan in Mumbai