CCEA to award oil blocks by mid-December

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The Cabinet Committee on Economic Affairs (CCEA) is set to take a final call on the award of discovered small fields for oil and gas exploration in India by the second week of December. 

The latest round of auctions attracted about 42 firms, which placed 134 bids for 34 of total 46 contract areas on offer. The government terms it, as a success as more than 73 per cent of the total area that was on offer got bids, in which 30 new companies showed interests. "CCEA is likely to give a clearance by the second week of December," said an official source close to the development. Union petroleum minister Dharmendra Pradhan recently said the discovered oil and gas fields will be awarded to the selected bidders by the end of December. 

The 46 contract areas on offer had an estimated reserves of 88 million tonnes of oil equivalent, which if comes into production, can cut down India's oil import bill by Rs 3,500 crore per annum.  The bidding round that kicked off on May 25 was mainly aimed at small companies. Though state-run Oil and Natural Gas Corporation stayed away from the auction, other major players such as Indian Oil Corporation, Anil Agarwal-led Cairn India, GAIL India, Bharat Petro Resources, Adani Welspun Exploration and Hindustan Oil Exploration Company participated in the auctions. 

The highlight of this round of auction was the interest shown by Dilip Shanghvi of Sun Pharma through Sun Petrochemicals and Subhash Chandra’s Essel Group through Essel Group Middle East.  “The response that we got is really exciting. We are going to evaluate the bids within the next 20 days and will come out with the list of shortlisted companies,” said an official from the Directorate General of Hydrocarbons (DGH), an arm of the petroleum and natural gas ministry that is conducting the bidding process.

The list of new firms also includes Gem Laboratories, Quippo, Oilmax Energy, Megha Engineering, Ramayana Ispat, Duggar Fiber, Nippon Power, Invenire Energy, Akhil Teja Natural Resources, Gopalka Savings, BDN Enterprises, Mahindra Infrastructure and Worldwide Oilfield. Moreover, the current round also saw the participation of 37 private sector companies of the total 42 in a race.  However, the auctions failed to attract many interests from overseas companies, despite the government having roadshows in the US, the UK, Singapore and West Asia. Only five foreign companies participated in the current round.  Even offshore areas also did not gather enough interest from bidders. While all the 26 on land contract area received e-bids, 8 of 20 offshore contract areas have received e-bids.Of the total 134 e-bids received, 120 e-bids were for on land areas and 14 e-bids were for offshore areas.

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