THE world’s largest oil multinationals, including BP, Shell and ExxonMobil, are among a throng of investors seeking rights to explore for oil and gas on India’s continental shelf.

Bids were submitted yesterday from more than 60 companies, including 34 foreign firms, for 55 exploration blocks covering a total area of 30,000 square kilometres, the largest auction of oil and gas acreage to be held in India.

Interest in the licensing has been high after recent finds in the sub-continent, notably Cairn Energy’s billion-barrel Mangala discovery. Fifteen bids were submitted for one deep-water block in the Krishna Godavari basin off India’s east coast, Murli Deora, India’s Minister of Petroleum and Natural Gas, said.

“We are very confident that perception [of India’s oil and gas prospects] is changing rapidly,” he said.

India’s oil import bill, currently $45 billion (£24 billion), is ballooning and adding to the financial burden of supporting fuel subsidies to the nation’s rural poor. Subsidies of as much as a third for kerosene and liquefied petroleum gas, used for cooking and lighting in rural areas, costs the Government $15 billion, according to the petroleum ministry.

More than two third’s of India’s oil is imported and India’s leading oil companies, including the state-owned ONGC, are in head-to-head competition with Chinese oil companies in the quest for foreign sources of fuel.

BG Group, of Britain, and the Anglo-Australian BHP Billiton are seeking acreage in the Indian licensing round. Cairn Energy is hoping to extend its Indian activity with a bid for 11 blocs.

Chevron, which already has a partnership with India’s Reliance Energy, has also bid.

Bidders will be judged on their technical skills, the scale of the proposed work programme and the profit share they seek from the state.

The results of the auction will be announced by the Indian Government at the start of next year. The Government hopes to generate about $7 billion from the exploration phase but the real benefits will come if any of these territories yield oil or gas.

Substantial gas reserves have already been found in the Krishna Godavari basin, and Chevron, Exxon and BP are thought to have been pushing aggressively for the right to explore in these areas.

The Indian Government has also been keen to court these global giants. It changed the bidding rules to give more weight to companies with “international credibility” so that it could attract big oil’s expertise and deep pockets.

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