The Hindu Business Line : ONGC Videsh, OIL skip latest auction rounds in Nigeria

New Delhi May 18 The latest round of oil and gas blocks auction in Nigeria saw major Indian exploration companies such as ONGC Videsh Ltd and Oil India Ltd (OIL) giving it a miss.

While OIL passed up the opportunity for want of a suitable partner, ONGC-Mittal Energy Ltd (OMEL) did not find the offer very attractive. However, Essar Energy Holding, part of Essar Global, is one of the bidders in the auction and is said to have bagged one block.

Official sources told Business Line that OIL with its consortium partner Indian Oil Corporation Ltd was looking for a local Nigerian partner enjoying preferential rights to bid for an exploration block on the basis of its promise to invest in infrastructure development in that country. "Since we were not able to firm up a local Nigerian company, we have not submitted our bids," the official said, adding that the consortium was keen on blocks that have proven reserves.

Though OMEL enjoyed the preferential rights from Nigeria, the company decided against participating, as the blocks were not found to be very productive. According to analysts, the industry seems to be getting selective on the blocks they want to bid for.

"This is a clear indication of the desired maturity in the sector, which was missing earlier. Previously, wherever opportunities were available the companies went for them," they said.

Bidding Round

Nigeria had put on offer a total of 45 exploration blocks. Out of these 11 are in deep water offshore, 10 are in shallow water on the continental shelf, 13 are onshore in the Niger Delta, and another 11 are located in inland basins.

The deadline to register bids was May 2 with results to follow thereafter.

About 10 foreign and local companies have been extended preferential rights for 20 blocks under Nigeria's right of first refusal (RoFR) system for the country's latest bidding round.

Under this system, the Nigerian Government gave the first claim on some of the blocks to companies that are willing to invest a minimum of $2 billion into the country's infrastructure.

Refusal Rights

Among the 10 firms winning preferential rights to bid for Nigerian exploration blocks are two Chinese energy companies CNOOC Ltd and China National Petroleum Corp.

Others receiving first refusal rights for certain blocks included Spain's Repsol, UK's Centrica, ONGC-Mittal Energy Ltd, Malaysia's Petronas and South Korea's Korea National Oil Corp.