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The wait might be getting over for the winners of the discovered small hydrocarbons fields the auctions for which concluded last year.
The Cabinet Committee of Economic Affairs on Wednesday approved the award of 31 contract areas under the Discovered Small Field (DSF) Bid Round 2016.
Speaking to newspersons after the Cabinet meeting, Finance Minister Arun Jaitley said, “Single bids were received for 14 contract areas, multiple bids were received for 17 contract areas.”
Monetisation of discovered fields which were with the public sector oil explorers ONGC and Oil India Ltd has been a challenge because of unviable fiscal regime. To exploit the areas, the government had decided to take some of these fields back from ONGC and OIL and offer them for auctions.
The government expects to monetise 40 million tonnes of oil and 22 billion cubic metres (BCM) of gas reserves over 15 years through the awarding of contracts.
A senior Petroleum Ministry official said, “the final signing of the contracts will take another two months.”
The DSF bid round envisages a revenue-sharing model, with pricing and marketing freedom to the contractors. Under a unified licensing policy, contractors can explore any resource: oil, gas or shale.
The Directorate General of Hydrocarbons (DGH) had received 134 e-bids for 34 of the 46 contract areas on offer under DSF. A total of 42 companies had participated, of which five were public sector undertakings/subsidiaries, 32 domestic private companies and five foreign private companies, according to DGH.
The auction saw many surprises with the entry of small and new players in the hydrocarbon exploration space, renewed interest in the Cauvery Basin, and lukewarm interest in the once-popular Krishna-Godavari Basin.
Among the successful bidders were Prize Petroleum Company, Megha Engineering & Infrastructure, Oilmax Energy, Nippon Power, Bharat Petro Resources, Sun Petrochemicals, HOEC, and Indian Oil Corporation.
Of the 134 e-bids received, 120 were for on-land areas and 14 for offshore. Despite the smaller contract areas on offer, the response from private companies was overwhelming; around 37 private sector players submitted e-bids, against 27 during the NELP-IX.
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