All content in this website is sourced legitimately

Page No: 1
Indian E&P programmes are "gamed"-I: Get the full story here
Mar 20: A detailed freshly published report has illustrated clear instances of how bidders have "gamed" India's NELP programmes.
8The entire scheme was badly planned and therefore lead to sub-optimal production.
8What happened was that the first-price sealed bid auction processes were susceptible to the ‘winner’s curse’ – a situation where the winner of the auction discovers that it may have overpaid for a lease when the second-highest bid is revealed to be relatively low.
8The problem of this overbidding can also be indicative of ‘speculative bidding’ – bids made with the main intention of increasing the value of a portfolio, particularly during times of high international oil prices.
8The risk to a government with overbidding was that the winner sought a post facto renegotiation of terms.
8The liquidated damages that were introduced later were highly inadequate to control the menace because the damages sought were pegged very low, at a fraction of the total cost of drilling a well.
8It looks like some of the charges made by the CAG that revenues were lost due to poor ex facto enforcement of NELP rules are likely to stick.
Click on Reports to know more


Back  |  Top