The response to India’s first open acreage auction for hydrocarbon exploration and development has not quite set the Yamuna on fire. No foreign oil major responded. Reliance kept away. Vedanta-Cairn has been recommended by an empowered committee of secretaries for award of 41of the 55 blocks on offer, and state-owned ONGC for two blocks.
Open acreage, not distinguishing between oil and natural gas, revenue-sharing instead of the profit-sharing after cost-recovery model, ill-suited for India’s trust deficient political economy — these are all sound features of the auction. Yet, the response has been tepid. The government needs to introspect why. Read More