Economy

Discovered small fields provide good entry point for many non-oil companies

M Ramesh Chennai | Updated on January 16, 2018

46 oil and gas fields put up for bidding saw a clutch of new entrants



The prospect of owning an oilfield without having to discover one first has provided many companies an opportunity to tip-toe into the deep-pocket business of hydrocarbons. The recent government bid-out of 46 discovered fields with limited production potential has attracted many non-oil companies.

Global oil majors as well as India’s biggest hydrocarbons producer, ONGC, have stayed out of the bids but the auctions run by the Directorate-General of Hydrocarbons has in all received 134 bids — 120 for the 26 onshore and 14 for the 20 offshore fields. Five of them are foreign companies.

While a clutch of the bidders are known names in the oil industry — Cairn India, IOC, GAIL and Hindustan Oil Exploration, to name a few — the majority of the bidders are first time entrants into the business of oil and gas production.

Some of them are companies that have been in the petroleum industry as services providers to oil companies — Aban Offshore, Quippo Oil and Gas (of the Srei group) and the Houston-based Worldwide Oilfield Machine. Others are rank outsiders to the business — Sun Petrochemicals, which produces acetylene black, Gem Laboratories (agro chemicals), Suraj Impex (soy meal) and Nandan Petrochemicals (lubricants).

The 67 oilfields that are contained in the 46 contracts are estimated to hold 625 million barrels of oil or oil equivalent gas. If the fields are developed, India would be able to save $525 million on oil imports, according to the Oil Minister Dharmendra Pradhan.

To the NSE-listed Hindustan Oil Exploration Company, the auction of the discovered fields provides multiple business opportunities.

Managing Director P Elango said the company has bid for six land and two offshore fields — one of the offshore field in partnership with Indian Oil Corporation and Oil India Ltd, and the other with Aban Offshore. Incidentally, HOEC is currently developing a gas field in Assam in collaboration with the two public sector oil majors.

Elango said that HOEC has identified nine out of the 20 offshore fields as juicy. The company is ready to partner with the winners of any of the nine, and would provide data interpretation services to the rest.

Published on December 01, 2016

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