* Pullout due to delays in clearances for exploration -
* BHP had acquired stakes between 2008 and 2010
PERTH/MUMBAI Oct 21 BHP Billiton is
walking away from almost all of its oil and gas interests in
India, citing an inability to carry out exploration operations
there and dealing the latest setback to the country in its
efforts to draw foreign investments.
The Anglo-Australian resources company would not confirm the
reason for its decision to relinquish its interest in nine oil
and gas exploration blocks in India, but local media reported it
is withdrawing because of delays in clearances.
BHP had earlier said it was facing delays in
receiving permits from India's defence ministry to conduct
necessary exploration activities.
The pullback comes as India has been looking to attract
foreign investment to bolster flagging economic growth and ahead
of a likely fresh round of energy block auctions in January,
which the government hopes will attract foreign energy firms.
"This is a sad story for India's E&P (exploration and
production) sector. Sentiments are already negative and exit of
BHP Billiton is going to do more harm," said R.S. Sharma, former
chairman of state-run Oil and Natural Gas Corp.
In 2010 Norway's Statoil and Brazil's Petrobras
decided against joining blocks operated by ONGC after
showing initial interest as they could not get necessary
approvals on time.
"They did not come on board because of such apprehensions
and delays in getting approvals," Sharma, who was the ONGC
chairman then, told Reuters on Monday.
India, beset by energy shortages that make power cuts common
and fetter industrial growth, is the world's fourth-biggest
importer of fuel.
It has tried to attract foreign investment in the oil and
gas sector to boost stagnant domestic output but global majors
have tended to take a pass on opportunities due to a perceived
lack of clarity in policy and bureaucratic hurdles.
In recent years, the only major foreign investments into the
sector have been London-listed Vedanta Resources'
acquisition of a controlling stake in explorer Cairn India
and BP's $7.2 billion deal to buy 30 percent
stake in some blocks operated by Reliance Industries.
Exploration efforts, however, have so far brought little in
the way of major finds partly because of the delays over
permissions but also in some areas because of geological
Some global companies, frustrated by bureaucratic hurdles,
have been scaling back their presence in India. Earlier this
year, South Korea's POSCO said it would pull out of
a $5.3 billion steel project, while retail giant Wal-Mart Stores
Inc, which has complained about restrictive investment
rules, recently ended a joint venture in the country.
BHP will give up its interest in six blocks in which it held
26 percent interest and local company GVK held 74
percent, as well as three blocks in which it held 100 percent
interest. It had acquired interests in the blocks between 2008
"The decision to relinquish these blocks is the result of an
exploration portfolio review ... there have been regular
discussions and communications over the last 12 months with the
Ministry of Petroleum and Natural Gas," BHP said in a statement
BHP Billiton will keep its 50 percent interest in one block,
operated by BG Group.