New Delhi, July 20 – At a roadshow in Calgary, Canada, to promote the auction of India’s discovered small hydrocarbon fields the Indian government has assured eventual operators of fully facilitating the monetization of these fields, an official said on Wednesday.
The Indian government delegation informed the participants that they look forward to foster harmonious collaborations with industry to help in taking the E&P (exploration and production) reform process forward by facilitating the bidders at every step towards monetization of these discovered small fields, a Petroleum Ministry statement here said.
The event was an interactive session at Calgary on Monday for the Discovered Small Fields Bid Round 2016 under which India is offering for auction 67 discovered small hydrocarbon fields in the country.
Earlier, roadshows for this bid round have been held in Mumbai, Guwahati, and last week in Houston in the US, the statement added.
The Houston roadshow consisted of detailed presentations and one-on-one meetings with the companies.
The 67 Discovered Small Fields (DSF) being offered for international bidding are those of state-run Oil and Natural Gas Corp and Oil India that could not be monetised during the previous years.
Bidding is open between July 15 and October 31.
The previous exploration licensing round ended in March 2012.
The auction will be under the new Hydrocarbon Exploration and Licensing Policy (HELP) approved in March, based on a revenue-sharing model as opposed to cost-and-output-based norms earlier.
The new model will replace the controversial production sharing contracts — by which oil and gas blocks are awarded to firms which show they will do maximum work on a block — that has governed the bidding under the earlier nine NELP rounds.
The government is offering bids for the 67 discovered small fields in 46 contract areas spread over nine sedimentary basins on land and in shallow and deep water areas. The offered fields hold 625 million barrels of oil and gas reserves.
Of the 46 small fields, 26 are on land, 18 offshore in shallow water and two in deep water.
While 28 discoveries are in the Mumbai offshore, 14 others are in the east coast’s Krishna-Godavari basin.
Eventual operators will be issued a single licence for exploration of conventional and non-conventional hydrocarbons and will have the freedom to sell oil and gas at arms length market prices. There would be no cess on crude oil.
The production sharing contracts regime, which allows operators to recover all investments made from sale of oil and gas before profits are shared with the government, was criticised by India’s official auditor, who said it encouraged companies to keep inflating costs — gold plating — so as to postpone giving higher share of profits.
The change in model is designed to help keep the government share in cases of windfall from both steep rise in prices as well as quantum jump in production.