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India’s Drill for Oil

Posted by g.e. on September 28, 2006

Bloomberg reports:
India’s sixth exploration offer prompted a record 165 bids on Sept. 15 because the terms are “very attractive,” Ian Blakeley at U.K.-based drilling consultant IHS Energy said. India will allow oil and gas producers to recover all costs before starting to tax revenue. Indonesia limits cost recovery to 80 percent, Malaysia 75 percent and Philippines 70 percent.

India’s biggest-ever offer of drilling rights comprised 55 onshore, deep-water and shallow-water areas. In the previous five rounds, the country offered 110 areas.

India, the world’s seventh-largest country, with 3.3 million square kilometers of land and 7,000 kilometers of coastline, may yield further finds because drilling by foreign companies was banned after independence from Britain in 1947. The government dismantled socialist controls in 1991, allowing the first concerted effort to promote overseas investment in the oil and gas industry to begin in 1999.

IHS, which has 6,000 customers worldwide, gives regulatory and technical information to energy, defense, aerospace, construction, electronics and automotive industries.

Along with some usual hyperbole from the ministry:
India estimates its reserves much higher. The nation may have reserves of about 240 billion barrels, of which 60 billion barrels have been discovered so far, according to Oil & Natural Gas Corp., the nation’s biggest explorer.

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