Lakshmi Mittal, the steel magnate, is hoping to secure substantial oil and gas interests in India as the country’s biggest offering of exploration acreage is put up for auction. He is expected to be among the foreign bidders for 57 offshore and onshore blocks to be tendered by the Indian Government tomorrow.

Murli Deora, the Petroleum Minister, said yesterday that he had held a fruitful meeting with Mr Mittal at the weekend. “He has expressed interest . . . I think he will bid, most likely to tie-up with some \ companies,” he said.

Any bid would come under the umbrella of Mr Mittal’s personal investment company rather than Arcelor Mittal, according to a spokeswoman for the steel company that he controls.

The Indian-born billionaire already has a joint venture with the state-run Oil and Natural Gas Corp and this year bought stakes in two Indian refineries. The $720 million (£355 million) acquisition of a 49 per cent stake in Hindustan Petroleum’s refinery in Punjab was the first foreign investment in India’s refining sector, which is dominated by state-run enterprises and Reliance Industries, India’s largest commercial group.

The deals were part of a strategy to build an oil business from scratch. Mr Mittal, Britain’s richest man, has exploration deals in Russia and Nigeria, but a bid under India’s seventh round of its New Exploration Licensing Policy would be his first upstream investment in the country.

The Indian Government said that it would announce the terms of the auction tomorrow, although local reports said that nine blocks would be in shallow water, 19 in deep sea and 29 onshore. The area on offer is expected to exceed the 352,000 sq km offered under the previous round.

The first roadshow for the auction will be held in Bombay next month, followed by an overseas promotional tour taking in London, Houston, Calgary, Singapore, Dubai and Perth. Bids are due in by April and the winners will be announced in June.

Indian ministers are hoping for strong international interest despite a series of frustrating delays. The auction was to have been held last spring but was deferred amid controversy surrounding the pricing of gas from blocks won under the previous round.

Overseas companies have been slow to enter the Indian exploration market, put off by bureaucracy, a perceived favouritism towards domestic groups and the economics of drilling relatively small reserves as rig prices rise. However, Cairn Energy’s billion-barrel oil discovery in Rajasthan has prompted more serious scrutiny from the big multinationals, while the Indian Government has changed the rules to encourage foreign investment.

Total, the French oil giant, said that it would be interested in bidding with a local partner. BG Group may also bid for deep water blocks after successfully picking up part of the Krishna-Godavari Basin in the Bay of Bengal under the last auction. Cairn, which has 15 oil blocks, is also expected to show its hand.

The latest auction is important for India because it suffers a mismatch between its supply of natural resources and its rampant economic growth. The country, where blackouts in the big cities are common and villagers still rely on wood and paraffin, imports more than three-quarters of its oil and gas needs. The dependence on foreign resources is set to continue. Analysts estimate that oil consumption in India will reach more than 3.2 million barrels per day by 2011, with domestic production at only 850,000 barrels per day.

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