Govt to bid out major unmonetized ONGC and OIL fields
PremiumPradhan said firms that have been awarded hydrocarbon blocks can’t indefinitely sit on discovered resources
As part of India’ energy security strategy, the government plans to auction large unmonetized oil and gas fields of state-run Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) to increase the country’ hydrocarbon production.
While speaking at the launch of the third bid round of Discovered Small Field (DSF), petroleum and natural gas minister Dharmendra Pradhan on Thursday said, “There will be no DSF next time. Next time, it will be a 'major' round."
MORE FROM THIS SECTIONSee All
The National Democratic Alliance government introduced the Discovered Small Field Policy by leveraging the small fields of ONGC and OIL.
Pradhan said that firms that have been awarded hydrocarbon blocks can’t indefinitely sit on discovered resources and asked director general of hydrocarbons and oil ministry officials “to devise innovative ways for early resource monetization, including expediting production timelines under DSF I & II."
These fields were awarded to ONGC and Oil India Ltd on a nomination basis. The move is aimed at boosting domestic output and securing India’s energy needs. The plan aims to leverage the expertise of private and foreign firms to grow domestic production and help meet India’s demand for energy.
“Resources don't belong to a company. They belong to the nation and the government. They cannot lie with a company indefinitely," Pradhan said.
This comes in the backdrop of India, the world’ third largest oil importer expected to be a growth driver of global energy demand, as articulated by Igor Sechin, chief executive officer of Rosneft Oil Company recently at the 24th St. Petersburg International Economic Forum.
“He urged that the work on DSF should be done at exponential speed and on a mission-mode to monetise our natural resources for greater public welfare," the petroleum ministry said in a statement.
Under the third round, 32 contract areas comprising of 75 discoveries are on offer. These bocks are spread over 13,000 square km and are expected to have 230 mt of hydrocarbon in place. The last date of bid submission is 31 August. In the first and second round, 30 and 24 revenue sharing contracts were inked respectively.
“Government of India had launched Discovered Small Field (DSF) Policy in 2015 which was a monumental step for awarding discovered acreages and monetize the unmonetized discoveries. The DSF policy has multiple attractive features like revenue sharing contract model with low regulatory burden, no minimum biddable work programme, no prior technical qualification required, no upfront signature bonus, etc.," the statement said.
In March 2015, Prime Minister Narendra Modi set a target of reducing import dependence on crude oil by 10 percentage points to 67% by 2022.
With domestic production unable to cater to the ever-increasing demand, India will depend on imports in the foreseeable future. The government has already provided for pricing and marketing freedom of gas from blocks awarded under the DSF, Hydrocarbon Exploration Licensing Policy and coal bed methane contracts, and discoveries from difficult fields such as deep water, ultra-deep water and high pressure-high temperature areas.
Never miss a story! Stay connected and informed with Mint. Download our App Now!!