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BPCL finds oil hunt mate

New Delhi, March 19: Bharat Petroleum Corporation Ltd (BPCL) is keen to team up with Brazilian giant Petrobras to bid for oil blocks under the new exploration and licensing policy (Nelp-VI).

BPCL chairman Ashok Sinha told The Telegraph, “We had bid in partnership with Petrobras in Nelp-V but did not succeed in bagging any block. However, we are confident of doing better this time.”

Sinha said by giving greater weightage to technical capabilities, the government has improved the bidding terms in Nelp-VI. Since Petrobras specialises in deep-sea oil exploration technology, the team stands a better chance in the current round.

In fact, the conditions for the sixth round make it clear that the experience of the company in deep-sea oil exploration will influence the government while awarding the contract for deep-sea blocks.

Sinha said Nelp-V rewarded bidders who made large work commitments. Some of the successful bidders had stated that they would drill a large number of wells, which they were in no position to actually undertake.

During Nelp-VI, this flaw has been corrected. The new bidding criteria has factored in the bidding company’s past experience in drawing up the new point system for awarding the blocks.

Sinha said BPCL was interested in blocks offered under the Nelp-VI and, even if the partnership with Petrobras did not come through, it would still go ahead with its exploration foray by forming a consortium with Indian upstream oil companies such as Oil and Natural Gas Corporation (ONGC) and Oil India Ltd.

Sinha has already attended the roadshow for Nelp-VI and has set within BPCL an upstream division headed by a general manager. The upstream division will look after the company’s interests in oil and gas exploration.

BPCL has an interest in the eastern offshore deep-sea blocks in which ONGC is the operator. While two of these blocks are in the Krishna-Godavari basin, the third is in the Mahanadi basin.

Indian Oil, BPCL, Hindustan Petroleum and GAIL (India) Ltd are the four downstream public sector units that the petroleum ministry has allowed to enter the oil and gas exploration sector in partnership with upstream oil companies.

The objective is to bring in more capital into oil exploration and spread the business risk among a larger number of companies.

GAIL has already tasted some success with an oil strike in the Cambay basin, which is expected to yield a net revenue of Rs 40 crore for the company next fiscal.

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