NEW DELHI - India's auction of exploration blocks evoked a tepid response as the economic slump, valuations and a corporate battle over the sale of natural gas from Reliance Industries' field put off investors, officials and analysts said.
Nearly half of 70 blocks offered found no bidder, with 76 bids submitted for 36 exploration blocks, D.N. Narasimha Raju, joint secretary in the oil ministry, told reporters.
Nobody will be happy with this response, Director General for Hydrocarbons V.K. Sibal told reporters at the close of the latest auction round by Asia's third-largest oil consumer, which meets 70 percent of its demand with imports.
Indian auctions have seen scant interest by global oil majors in the past, but foreign firms such as Cairn Energy and local companies such as Reliance and state-run Oil and Natural Gas Corp have been active bidders in previous auctions.
In the previous seven auction rounds, India awarded 203 oil and gas blocks. Last year, it got 181 bids for 45 blocks.
In the current global economic scenario, even though oil prices are seen going up, oil companies are still very wary of investing in exploration blocks in India, Deepak Pareek, an oil and gas analyst at Angel Broking, said.
They might find much better valuations elsewhere in the world and are not confident that blocks in India will yield good results.
Two Reliance executives, who did not want to be identified, told Reuters that the company had not bid this time. The government had showcased the firm's giant deep-sea gas field off the east coast as a success story for India's exploration sector.
BHP Billiton provisionally won three shallow-water blocks in the Mumbai basin, off India's west coast, the government said.
Cairn India, a unit of Cairn Energy, was the provisional winner for a deepwater block in the Mumbai basin, and ONGC and its partners were provisional winners for 7 deepwater blocks.
One of the blocks is in the vast KG basin, where Reliance made India's largest gas find. ONGC's parters in the block include the Indian arm of British Gas and the Andhra Pradesh state government.
Reliance's chairman Mukesh Ambani and his younger brother Anil have been locked in a bitter, public dispute over the sale of natural gas from the field discovered before the business house was divided between the siblings.
The government has intervened in the legal dispute, saying the price of gas sold from the field would influence the government's share of the revenue from gas sales, but analysts say potential investors would seek greater marketing freedom.
Any fight is negative, Sibal said, adding that potential investors had been given wrong signals.
India also received 26 bids for 8 blocks out of the 10 offered under the fourth round auction of coal bed methane blocks. (Editing by John Mair)