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.