The irony was that the lackluster response came in a year India brought on stream a giant deepwater natural gas field off its east coast, which is poised to ramp up to a peak output of 2.82 Bcf/day within 12 months. And started pumping crude from a block in Rajasthan, the country's first onland oil find in two decades, which is tipped to produce 175,000 b/d by the first half of 2011.
In contrast, the last upstream bidding round in 2008 had attracted 181 bids for the 57 blocks on offer.
Of the international players and oil majors India was trying to woo, only BG, BHP and Cairn Energy showed up at the party.
So what went wrong? Was it the depressed global economic climate and financial constraints faced by oil companies? Likely, but that could not have been the only reason. Was it insufficient data on some of the blocks? Might have been a factor, but probably not a major one.
Was it doubt and question marks over the country's gas pricing and utilization policy? Absolutely.
While the world took note of Reliance Industries Limited's speedy commercialization of the D6 gas reserves in a challenging offshore environment, it was also bombarded by reports of the company's fierce legal battle with Reliance Natural Resources Limited over a preliminary gas supply deal gone sour.
The high-profile dispute between companies headed by the estranged Ambani brothers, sons of Reliance founder Dhirubhai Ambani, also sucked in the Indian government and raised questions about the state's role in commercial matters in India.
The government insists it only approves the price of domestic gas production, and the contractor is "free" to set the rate based on a market-linked formula -- a statement that might look contradictory to the outside world.
The government also allocated the first 1.4 Bcf/day of D6 production to specific power and fertilizer companies, city gas and LPG, identified as the priority sectors. That would not seem very encouraging to potential upstream investors.
Besides, the regulatory regime in India needs to come up to world standards. The downstream regulator, the Petroleum and Natural Gas Regulatory Board, remains a nebulous and anemic entity with no clear mandate more than two years after its establishment in mid-2007.
Apart from focusing on the setting up of city gas distribution networks, it has not applied itself to any of the weightier issues facing the downstream oil and gas sector so far.
Though gas supply in the country -- both output from indigenous fields and regasified LNG from imports -- is growing exponentially, the government has dragged its feet on putting together a coherent policy on a national gas grid for several years now. A pan-Indian pipeline network could be in place by 2015 at the earliest, chairman of the downstream regulator, L. Mansingh, said earlier this year. But the government has yet to come up with a blueprint for its long-distance "gas highways" plan.
International upstream roadshows are good. But getting the country's oil and gas infrastructure in place and establishing a fair, transparent regulatory regime is far more crucial for attracting investment dollars.
I would agree that the Ambani family feuds over pricing policy with each other -- and with the government -- over the years have put a big dent in the confidence of Big Oil in making Big Investments into India. I would add a practical note, however: more than one E&P expert has told me over the years that the seabed around India's major blocks are littered by a spaghetti junction of subsea oil pipelines old and new, telephone lines, cabling of all varieties and various sea litter of the highly disruptive kind. Much of which is unreliably inventoried, mapped and documented.
Thanks for that nugget of information, Dave. Very interesting indeed, especially given India's push into offshore exploration -- 52 of the 70 blocks on offer were in the sea. Also underscores the need for the government to have its ear close to the ground, pick up on the undercurrents, and set the record straight where needed.