Byline: Rajeev Jayaswal & Soma Banerjee

NEW DELHI: Reliance Industries (RIL) is learnt to be talking to three mid-sized oil companies - Australia's Santos, Devon Energy and AARCO of the US - to bid for oil and gas blocks in the seventh round of the New Exploration Licencing Policy (NELP).

RIL's aim is to partner a foreign company with the required technological expertise. Global oil giants like ExxonMobil, Chevron and Conoco Phillips are unlikely to bid in this round. Although the final word is not out yet (bids are set to open only by June end), analysts say no oil major is interested in investing in India's oil and gas sector at this point, thanks to the policy uncertainties over tax sops and marketing freedom.

All the three foreign oilcos have done considerable deepwater work, particularly in the Gulf of Mexico. Devon Energy, a Fortune 500 company with a market cap of $46 billion, has operations in the US and Canada.

The company is among North America's largest producers of natural gas liquids. It is engaged in E&P activities in the Gulf of Mexico, Canada's Arctic region, China, Brazil and Azerbaijan.

In the Gulf of Mexico, Devon holds 2.2 million net acres in the deepwater. The deep Gulf, where depths can be over 10,000 feet, is a promising frontier where Devon has made exciting oil discoveries.

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Australian oil and gas major Santos has already opened its account in India, bagging blocks under NELP VI. Santos has operations in all major Australian petroleum provinces, Indonesia, Papua New Guinea, Vietnam, Bangladesh, Kyrgyzstan and Egypt. AARCO's international arm made its first commercial natural gas discovery off China's coast in the 1980s and built a 700 km sub-sea pipeline to pump the gas to Hong Kong. In 1996, AARCO announced a joint venture with Lukoil.

RIL, which is poised to start production from the KG basin over the next few months, hopes to move into deeper waters, which requires state-of-the-art technology. Worldwide, ExxonMobil, Chevron and BP are key players in this sphere.

A strategic partner will help RIL derisk some of its exposure as exploration of oil and gas has a huge risk premium. The thinking behind the current strategy is also driven by RIL's positioning as a global energy major with fuel from its refinery now being sold across several European, Asian and US markets.