BHP abandons Indian projects

BHP blames inability to finish exploration for giving up on projects.

Global mining and energy giant BHP Billiton (BHP) has announced that it has given up on nine Indian deep-sea oil and gas projects due to delays in carrying out exploration at the sites.

The Anglo-Australian giant said on Monday it had relinquished six blocks in the Bay of Bengal which it partly owned with Indian conglomerate GVK, and another three that it owned fully.

"The decision to relinquish these blocks is the result of an exploration portfolio review and the inability to carry out exploration operations in these blocks," a BHP spokesman told AFP in an emailed statement.

GVK said in its latest annual report that it had hit a "roadblock" with the defence ministry, which must approve exploration activity at the blocks, and had decided to suspend further investment.

The BHP spokesman declined to elaborate on the abandonment of the sites, which were allotted between 2008 and 2010 under India's New Exploration Licensing Policy, known as NELP.

BHP's exit is another blow to efforts to attract vital foreign investment needed to upgrade the nation's dilapidated energy, road, rail and other infrastructure.

Three months ago, South Korean steel giant Posco announced it was abandoning plans to build a $5.3-billion steel mill project due to approval delays.

That same month, Luxembourg-based steelmaker ArcelorMittal gave up efforts to construct a second steel plant in eastern India over similar problems.

India is heavily dependent on imported fuel and has been slow to develop domestic resources, leading the petroleum ministry to warn earlier this year that red tape was deterring foreign firms.

The announcement marks a sharp reduction in BHP's India presence, leaving it with just a 50 per cent interest in a deepwater block off the west coast. The other 50 per cent is held by Britain-based oil company BG Group.

The two firms are awaiting seismic survey results from that block.

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