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Economic downturn 'caused disappointing Indian oil auction'

13 October, 09
An auction for oil and gas exploration in India has seen almost half the blocks receive no bids, due in part to the global financial situation, an expert has said.

Diesel users may have hoped that the auction would lead to increased oil production, which could have led to lower prices.

The Indian government's director general of hydrocarbons V K Sibal told the Wall Street Journal: "Nobody will be happy with this response. The main reason is the economic turndown."

It saw only 76 bids placed for 36 of its oil and gas blocks, with a further 34 blocks seeing no investor interest.

Back in 2008 when the price of oil was almost at $146 (£92.40) per barrel, the hydrocarbons directorate saw 181 bids from companies to buy oil and gas rights on 45 of its blocks, out of a possible 57 available.

BP recently won an auction to triple oil production at the Rumaila field in the south of Iraq, which it is expected will see the energy giant spend between $10-20 billion (£6-12 billion) on the deposit.ADNFCR-2675-ID-19406845-ADNFCR

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Economic downturn 'caused disappointing Indian oil auction'