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India awards latest oil exploration licenses

India awards latest oil exploration licenses

Mumbai: India's offshore oil and gas sector received a shot in the arm this week as the country's Cabinet Committee of Economic Affairs (CCEA) awarded 52 out of 55 oil and gas exploration blocks to domestic and foreign oil firms. In the sixth round of licensing, the largest ever, state-run Oil and Natural Gas Corp (ONGC) will operate 24 blocks ?" 12 in deep water offshore, two in shallow water and the rest ashore whilst the UK's Cairn Energy will operate one shallow-water offshore block with ONGC.

Other beneficiaries include Indian private energy firm Reliance Industries Ltd which was awarded seven deep-sea blocks, thought to offer significant potential, and Australia's Santos with two deepwater blocks. Meanwhile Focus and Petrogas will have one block each, both in shallow water. The country's seventh round of licensing is due in mid-April.

The quest for new oil off India's shores comes against a backdrop of rapidly rising domestic consumption and significantly higher oil prices which have both contributed to a frenetic surge in offshore construction in many parts of Asia. Meanwhile, spot crude prices have rebounded on western markets as cold winter weather has led to a drawdown in stocks. Benchmark crude prices had drifted down through January to around $50 by the end of the months but have picked up again in recent days, to around $58 a barrel.  [09/02/07]