ONGC likely to get five oil, gas blocks in second round of DSF auction

A technician is pictured inside a desalter plant of Oil and Natural Gas Corp (ONGC) on the outskirts of Ahmedabad (Photo: Reuters)
State-run Oil and Natural Gas Corporation (ONGC) is likely to get the maximum number of contract areas — five — in the second round of discovered small fields (DSF-II) auction. However, despite putting in 21 bids for 84 per cent of the total areas on offer, officials said, Anil Agarwal-led Vedanta will be getting only two.

The other upstream auction under the open acreage licensing policy (OALP), however, is likely see merger of the second and third rounds. The Ministry of Petroleum and Natural Gas (MoPNG) is considering a proposal for announcing winners after the upcoming Lok Sabha elections. The Directorate General of Hydrocarbons (DGH) was expected to come out with the list of winners of the OALP-II on March 12. An official said with elections likely to be declared before that and the moral code of conduct in place, the government may go for merging of the announcing dates of the two rounds.

The government can, however, announce OALP-II winners, but only after seeking permission from the Election Commission. It was during the recently concluded Petrotech that India launched OALP-III, in which 23 areas have been put on bidding for global oil and gas majors. Under OALP, India is opening up its blocks for bidding after every six months.

According to multiple sources close to the development, the DGH has already opened the price bids for DSF-II and has sent the list of winners to the MoPNG for its final clearance.

When Vedanta showed interest for 21 areas under DSF-II, it had raised eyebrows as the company had bagged 41 of the 55 blocks that were on offer under OALP-I. Asked why Vedanta, despite being the country’s largest private sector oil producer, bid aggressively for DSF-II, Sudhir Mathur, chief executive officer at Cairn Oil & Gas, Vedanta’s oil and gas subsidiary, had said, “They are not major movers but it helps us understand India’s geology a lot better, train our people and bring oil to the country.”

Of the 25 contract areas that were on offer under DSF-II, around 39 companies submitted bids for 24 areas, while no one showed interest for the only block that was on offer in Kutch offshore. Another state-run major Oil India would be getting two blocks. Both ONGC and OIL had bid for 10 blocks each.

The most aggressive bidding took place for Chinnewala area in Rajasthan basin for which at least 17 companies were in fray. ONGC would be getting it. “The companies that got the maximum number of areas on offer include ONGC and Ganges Geo Resources (GGRPL),” said a person close to the development.

The government is offering a total of 3,000 square km area with a resource base of over 190 million metric tonne in DSF-II. Other private players that participated in the bidding included Dilip Shanghvi’s Sun Petrochemicals, Hindustan Oil Exploration Company (HOEC), Nippon Power, Haryana City Gas Distribution, Essar Oil and Gas Exploration and Production and Oilmax Energy.