1. Dharmendra Pradhan to lead Singapore roadshow on auction of hydrocarbon fields

Dharmendra Pradhan to lead Singapore roadshow on auction of hydrocarbon fields

India's Petroleum Ministry along with the Directorate General of Hydrocarbon (DGH) is organising an interactive meet-cum-roadshow on September 9-10 in Singapore, a DGH statement said.

By: | New Delhi | Published: September 8, 2016 4:26 PM
Union Petroleum Minister Dharmendra Pradhan will lead a roadshow in Singapore on Friday on the upcoming auction of India's 67 discovered small hydrocarbon fields, an official statement said. (Reuters) Union Petroleum Minister Dharmendra Pradhan will lead a roadshow in Singapore on Friday on the upcoming auction of India’s 67 discovered small hydrocarbon fields, an official statement said.
(Reuters)

Union Petroleum Minister Dharmendra Pradhan will lead a roadshow in Singapore on Friday on the upcoming auction of India’s 67 discovered small hydrocarbon fields, an official statement said.

India’s Petroleum Ministry along with the Directorate General of Hydrocarbon (DGH) is organising an interactive meet-cum-roadshow on September 9-10 in Singapore, a DGH statement said.

“During the meetings, Pradhan is expected to highlight the paradigm shift in the policy regime for the exploration and production sector in India and the improved investment environment for E&P (exploration and production) companies under the new Hydrocarbon Exploration Licensing Policy (HELP) which emphasises on improving the ease of doing business and operational autonomy to attract investment,” it added.

The hydrocarbons regulator said that with significant reforms introduced to reduce regulatory risk, the industry will find the revised guidelines and processes attractive for the current bid round.
Pradhan will also meet Asian oil and gas industry leaders to attract Foreign Direct Investment in the Indian exploration and production sector.

“The response received so far has been encouraging and India is hoping to receive significant investments from Asian-based companies,” the DGH said.

Road shows were earlier held in July in the US and Canada, for the auction of India’s 67 hydrocarbon discovered small fields (DSF).

These DSF of the Oil and Natural Gas Corp and Oil India could not be monetised during the previous years and are being offered for international bidding now. 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.

Under the Discovered Small Field Policy, the government is offering for bids 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 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 a higher share of profits.

The change in model is designed to help keep the government share in cases of windfall from both a steep rise in prices as well as a quantum jump in production.

  1. K
    Kanchan Kumar
    Sep 9, 2016 at 4:49 pm
    The falling oil price and uncertainties since June 2014 have shaken investors’ confidence in oil sector. Oil companies are curtailing capital commitments. But the present bearish phase provides a hidden opportunity to enter and diversify or expand into oil sector. A Bidder can expect to get the discovered fields at comparatively favourable terms.As the demand for oilfield service providers has gone down, the exploration, drilling and development costs have also declined. One can focus more on exploration at a low cost. Any successful discovery translates into actual commercial production only after five to seven years; by which time the oil prices, with all probability, would be recovered. This will enable to sell oil at much higher price than the present prevailing price, giving higher returns on capital invested now in exploration and development. A small field is all about economics. This is the right time to identify investment opportunities in oil sector and focus on geographies most likely to create long-term value.
    Reply
  2. K
    Kanchan Kumar
    Sep 10, 2016 at 1:09 pm
    Today is the right time to identify investment opportunities in oil sector and focus on to create long-term value. With falling oil price, the oil field services cost has also gone down. One can focus more on exploration and development at a low cost. Any successful discovery translates into actual commercial production only after five to seven years; by which time the oil prices, with all probability, would recover bringing high return on today’s low investment.
    Reply

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