Reuters

India expects $7 bln investment in oil exploration

11 April 2006

NEW DELHI, April 11 (Reuters) - India expects oil firms including global majors to invest up to $7 billion to explore oil and gas in the country under the sixth round of its New Exploration Licensing Policy, oil minister Murli Deora said.

"Companies like Chevron and Exxon attended our roadshows. We expect a very good response," Deora told reporters on Tuesday.

India, which imports 70 percent of the oil it consumes, invited bids for 55 oil and gas exploration blocks in February, hoping to attract private capital in its search for oil.

"For the first time all the major oil companies have exhibited interest in acquiring data packages of India's sedimentary basins," Deora said.

He said foreign firms were likely to bid because of better terms offered to potential investors, the enactment of a law to appoint a regulator for the oil industry and oil and gas discoveries announced in the last three to four years.

These include the discovery of oil by Britain's Cairn Energy (CNE.L: Quote, Profile, Research) in the desert state of Rajasthan and gas by India's Reliance Industries Ltd. (RELI.BO: Quote, Profile, Research) in the deep waters of the Bay of Bengal.

Companies which have acquired exploration acreage in the previous rounds of NELP have committed to spend $5 billion to explore oil and gas in India.

Petroleum Secretary M.S. Srinivasan said the government expected a higher investment this time because it had offered a larger number of bocks, including many in deep-sea regions which require large investment. 

*******