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A promotional sign adorns the stage at a BHP Billiton function in central Sydney, Aug. 20, 2013. Reuters/David Gray

Joining a handful of foreign companies that have come up against regulatory hurdles in India in recent years, BHP Billiton Limited (NYSE:BHP), a Melbourne-based mining company with operations in more than 100 locations worldwide, exited 10 oil and natural gas exploratory fields in India that were won at government licensing auctions, after the company failed to secure clearance from the country’s Defense Ministry.

India has a dim track record in attracting foreign players to hydrocarbon-exploration licensing auctions, and state-run companies usually procure majority of the exploratory blocks awarded under the New Exploration Licensing Policy, or NELP. And, several foreign players who win exploratory rights are turned off by official delays and denials, despite a warning from India’s oil ministry that such actions could hinder the country from attaining energy security.

“BHP Billiton has exited all its NELP blocks (other than the one with BG Group) because of delays in defense clearance,” a source familiar with the development told the Mint newspaper. The Australian miner will continue to explore a deepwater field in the Mumbai basin, along with BG Group plc (LON:BG), the report said.

BHP Billiton’s move also hurts India’s GVK Power and Infrastructure Ltd. (NSE:GVKPIL), which has a majority stake in seven of the 10 blocks that were surrendered, Mint reported.

An official at India’s Ministry of Petroleum and Natural Gas confirmed the pullout, saying BHP Billiton had not secured a “full-scale clearance” to explore in the blocks allocated under licensing auctions. “BHP was raising issues of blanket clearance,” the unnamed official told Mint.

In recent years, lack of reforms, local opposition and bureaucratic red tape have resulted in the failure of many big-ticket projects that would have brought in much-needed foreign direct investment, which would be crucial to resuscitate India's slowing economy.

The world’s largest steel company, ArcelorMittal (NYSE:MT), canceled a project to develop a steel plant worth $8.5 billion in the eastern state of Odisha in July, closely followed by a pullout by South Korea’s POSCO (NYSE: PKX), which abandoned a $5.3 billion project in the southern Indian state of Karnataka. Wal-Mart Stores, Inc. (NYSE:WMT), which has been trying to establish business in India since 2007, recently dissolved its partnership with India’s Bharti Enterprises and will need to find another local partner to set up business in the country under foreign investment requirements.

Under NELP, the government has allocated exploratory rights for 249 fields so far since its launch in January 1999. India imports 80 percent of its crude oil and 25 percent of its natural gas, and is only behind the U.S., China and Russia in global energy consumption.