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India’s biggest E&Ps – ONGC and Oil India – have announced that they won’t be taking part in 67 tenders for the development of newly discovered oil and gas deposits, to be carried out by the end of the month.
According to sources close to the companies, ONGC and Oil India chose to pass on the tenders to give way to smaller companies.
The deposits to be tendered hold an estimated 88 million tonnes of crude in recoverable reserves, and if developed, India will reduce its spending on imported crude by about US$525 million annually, according to Petroleum Minister Dharmendra Pradhan.
The minister went on several roadshows abroad this year to promote India’s energy sector and the government’s efforts to facilitate the entrance of foreign companies into the Indian market, including in the UK, the U.S., West Asia, and Singapore. India’s Financial Express cites unnamed sources as saying that more than 12 companies have bought the geological data on the fields that are being tendered.
India is shaping up as the next industrial powerhouse of the world, for which it needs growing amounts of crude oil and products. Most of what the country needs in crude, 80 percent, comes from abroad, which is not good enough, so the state is focusing much effort on developing its own hydrocarbon reserves and also buying assets abroad.
Last month, India’s crude oil imports reached the highest since records began, standing at an average 4.45 million bpd, up 9.1 percent on September 2015. Gasoline and diesel demand are also growing fast, prompting local refiners to expand capacity at the fastest rate possible.
Indian E&Ps, for their part, are scouting for new opportunities abroad. ONGC just recently finalized a deal to acquire a further 11 percent in Russia’s huge Vankor field, bringing up its total interest to 26 percent. Oil India is also big on Russian assets: recently a consortium led by the company bought stakes of 29.9 percent and 23.9 percent, respectively, in the Taas-Yuriakh and Vankor fields.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.