The companies that have placed bids are little known ones in the field of global exploration and production: Cairn Energy (UK), Petrom (Romania), Niko Resources (Canada), JTI (US), Hardy Oil (UK) and Heramec Ltd (UK).

Out of these, five overseas companies have placed bids for one block each, while Hardy Oil, in partnership with Reliance Industries, has bid for 15 blocks. Petroleum and natural gas minister Ram Naik and his officials, however, put a brave face, claiming that the response to bids ratio was as high as 92 per cent and, for the first time, the country had attracted companies for 23 blocks of 25 offered.

"It is significant that in this round all the blocks on offer barring two onshore blocks have received bids. As compared to this, out of 48 blocks offered under NELP-I, only 27 blocks had received bids," the minister said after the closure of bids. The break-up shows that only one company has bid for 11 blocks, while two companies have competed for eight blocks. One block is exceptional of this lot as it has attracted bids from six companies.

The state-owned companies-ONGC, Oil India Ltd, Indian Oil Corp and Gas Authority of India Ltd., have bid for 19 blocks. The country's poor record in terms of discovery of hydrocarbons and discovery of hydrocarbon reserves for commercial production is the main reason for this feeble response.

Multinationals like Shell and Chevron did search for oil in Indian onshore and offshores in the eighties but with no success. Some of them had discovered oil but could not find enough reserves to commercialise. The exploration blocks offered to private companies/international oil companies were considered to have less oil bearing.

Several international oil exploration companies were critical of the government. They felt the government had offered the blocks left out by state-owned oil companies. They said over 85 per cent of the potential oil bearing blocks had been retained by the state-owned oil companies, while the remaining 15 per cent were given to the private sector.

In the early 90s, two kinds of contracts were awarded. The first one was meant for the small-sized fields aimed to be awarded for private companies with no equity participation from national oil companies. The second one was for medium-sized fields targeted to be developed in joint venture between private and national oil companies. Red-tapism had further worsened the situation. There was considerable delay in awarding contracts for oil exploration. For instance, contracts for some of the exploration blocks, which were signed between 1991 and 1994, were awarded only in June-July 1998. These bureaucratic delays and discriminate treatment towards private/international oil companies had discouraged them.

Stagnation in oil and gas production and growing dependence on imported petroleum products had forced the government to relook at the country's exploration and development activities. Both the finance and petroleum ministries had recognised the importance of private capital in accelerating the exploration activities in the country to reduce dependence on imported products, heavy drain of foreign exchange and consequent macroeconomic instability. The result was the announcement of the New Exploration and Licensing Policy (NELP).

Though the incentives offered to exploration and development companies under NELP are more or less on a par with that of other countries, the poor track record, stagnation in oil and gas production from the existing reserves and near absence of new oil and gas discoveries have discouraged international oil companies from making investments in Indian blocks, though the domestic market offers vast business opportunities for energy products.

At the same time, countries like Indonesia, Malaysia, Thailand, Vietnam and Central Asian Republics have rolled out red carpets for global oil companies. These countries are known to be rich with hydrocarbons and their strength in terms of oil and gas infrastructure and discovery of new reserves score better marks over India. International oil companies are increasingly looking at countries that are known to be rich with hydrocarbons.

Because of high risks associated with E&P activities, it is characterised by a high degree of uncertainty, with the abandoning rate ranging from from 35 per cent (at the development plan preparation stage) to 80 per cent (at the exploration stage).

The fact is that oil industry throughout the world is highly competitive, with oil company strategies changing on a continuous basis on the one hand and more and more countries trying to attract petroleum investments on the other. Whoever offers better facilities will attract investments.