Mukesh Ambani-promoted Reliance Industries (RIL) on Wednesday postponed bidding for gas it plans to produce from its R-cluster field in the Krishna-Godavari (KG) basin, said sources. This is the second time RIL has changed the bidding date; the new date is now November 15.
Sources in the company said bidders want more time to adapt to the new bidding system. Some added RIL may be facing lack of interest from potential bidders.
“There is a lack of interest from bidders; they are not keen, given the current set of terms and conditions for the bidding,” said a source.
An RIL spokesperson said, “We have got a very good response from customers. The date has been postponed to accommodate request from customers for additional time to complete their internal processes and preparing bid-related documentation.”
Sources in the company said, “Bidders have requested for more time. They need to be more conversant with the system.”
RIL, along with UK partner BP, will be selling 5 million standard cubic metres a day from its R-cluster field in the KG basin through an e-auction mechanism. The original date for bidding was set at October 11, which was then moved to November 6. In its investor presentation for the September 2019-ended quarter, RIL said work on the R-cluster is on track for first gas in mid-2020.
In September, Business Standard reported the discovered price through e-auction, will be capped by a ceiling set by the government every six months for gas produced from difficult fields. The base price would be 9 per cent of the average Brent price for three months preceding the delivery date.
CRISIL Risk & Infrastructure Solutions is the appointed manager for the auction, to be conducted on the platform of ProcureTiger, a brand of Gujarat-based e-Procurement Technologies.
Through its investment in the R-cluster series, RIL is attempting a second try at India’s hydrocarbon exploration and production sector. With two of its clusters, R-series and Satellite series, likely to start production in the next two years, the company looks to turn around production from this business. Any significant delay in finding buyers for the production from these assets may further hurt the company’s E&P business. For the September 2019-ended quarter, RIL’s E&P segment reported earnings before interest and tax loss of Rs 306 crore.