The Directorate General of Hydrocarbons (DGH) is hopeful of achieving $1.2 billion worth of investments after the second round of bidding of discovered small fields (DSFs) is completed by the bidders. The government launched the bid round II under DSF for international competitive bidding on August 9 this year which opens up fresh opportunity for new players to enter the sector with minimal risk.
“The total investment committed in the DSF-I was $600 million. We expect it to double this time to at least to $1.2 billion. In the second round of bidding, the area is doubled and reserves are also doubled when compared to round 1. The area is 3,000 sq km and reserves are 190 mmtoe (million metric tonnes of oil equivalent),” VP Joy, director general, Directorate General of Hydrocarbons, said in an investors’ meet for DSF bid round II in Hyderabad. This round has attracted a few international players as well. He said the import dependence, which is currently about 82%, is expected to be reduced by 10% by 2022.
Under this bid, 25 contract areas are on offer covering 59 discovered small fields which include 15 onland and 10 shallow onshore, spread over 3,000 sq km with prospective resource base of over 190 mmtoe. The e-bidding portal is open till December 18. It is aligned with the Hydrocarbon Exploration and Licensing Policy (HELP) with a revenue sharing model along with reduced royalty rates and no cess, single license for all hydrocarbons besides pricing and marketing freedom, he said.
In the first round of bidding for DSF last year, 134 bids were received for 34 blocks out of 46 on offer. Joy said within this financial year, the contracts would be awarded to the successful bidders who were supposed to start production within three years after being awarded the contract. “The successful bidder will get the petroleum mining lease on their name. They will have to submit the field development plan, then drill the wells and start production. As per the terms and conditions, they will have to start production within three years after they were awarded,” he said.
On the National Seismic Programme updates, he said, “The government has earmarked Rs 3,000 crore and out of this, about Rs 1,000 crore has been spent. The processed data pertaining to Mahanadi basin has already been published and about 60% of the data has been acquired. The data on Rajasthan is expected to be displayed next month.” The data will be available to investors to help in exploration and production activities. The DGH had identified 26 basins across the country and out of which only seven are witnessing commercial production and another five have been identified of having good potential of oil and gas reserves.