Realtor turns oil producer as india eyes domestic production boost
A drugmaker, a true estate developer and an edible company are among firms answering India’s call to tap undeveloped oil fields and become the most recent explorers within the world’s fastest-growing energy consumer.
As several as 42 companies bid within the country’s auction round that closed nov. 21. they're vying for 34 of 46 discovered oil and gas fields with estimated reserves of quite India’s total annual output, in line with a government statement.
“A heap of the bidders are initial time players in oil and gas,” Atanu Chakraborty, the pinnacle of oil regulator, directorate General of Hydrocarbons, said during a phone interview on tuesday. “Our intention was to form concerning 5 new oil and gas companies through this auction, and I’m certain we are able to do this.”
Prime Minister Narendra Modi is striving to woo investors to help boost oil and gas production from local fields as he targets to reduce overseas energy purchases by 2022. India’s $2-trillion economy imports quite 80th of its crude requirement and a heavy reliance on imports risks its status because the fastest-expanding major economy within the world. The International Energy Agency expects the country to be the fastest-growing crude consumer within the world through 2040.
Of 37 non-state companies that have bid, 32 are domestic and 5 are international, Chakraborty said. These include Sun Petrochemicals Pvt., a privately owned company formed by the directors of drugmaker Sun pharmaceuticals Industries Ltd., Megha Engineering & Infrastructure Ltd., Enquest Drilling Pvt. and real estate firm Cheval Developers Pvt.
Cheval Developers Pvt., a true estate firm based in Ahmedabad, within the western state of Gujarat, is vying for 5 discovered fields.
“The real-estate sector is during a bad form, and that i was looking for other opportunities,” director Nishit Patel said by phone. “Oil has changed the fortunes of the many. I’m betting on that.”
Nippon Power Ltd. bid for eight fields, as well as 3 within the northeastern state of assam, in line with a government statement. Explorers bharat Petro Resources Ltd., Cairn india Ltd. and hindustan Oil Exploration Co. can compete with the company in some of the areas as larger established companies like Reliance Industries Ltd. and Oil & natural gas corp. have stayed away.
The foreign bidders include the local unit of Hardy Oil & Gas Plc. All the companies mentioned in this story confirmed bidding for the auction.
P. Elango, managing director of hindustan Oil Exploration Co., said the government’s decision to lower the entry barrier by removing technical qualifications helped small domestic companies.
“In this oil price setting, no overseas company can head to a new country and invest,” he said. “The only strategy is to involve local players.”
State-run ONGC dominates E&P in india. the biggest explorer is struggling to stem a drop in India’s oil output in recent years as most of its fields are maturing. The areas that went under the hammer were discovered by ONGC and state-run Oil india Ltd. with estimated in-place oil and gas reserves of concerning 625 MMbbl. They weren’t developed because the explorers centered on larger fields.
“These new companies along with the existing producers will take india forward in fulfilling our targets,” said DGH’s Chakraborty.
Oil Minister Dharmendra Pradhan said the bids for the fields are going to be awarded by December-end, per a report within the financial express newspaper wednesday. india aims to sign contracts for the little fields by january, Pradhan had said in may.