Petroleum minister Dharmendra Pradhan on Thursday released the notice inviting order and bid documents for the second round of auction of hydrocarbon fields under the Discovered Small Field (DSF) policy. A total of 59 marginal fields clubbed into 25 contract areas have been put up for grabs, the auctions for which will start in September and end in December. The fields will be awarded in January, 2019. DSF is part of the Hydrocarbon Exploration Licensing Policy (HELP) regime which provides a single licence for exploration of all forms of hydrocarbons (including shale gas and coal-bed methane), a simple revenue-sharing model and marketing and pricing freedom for developers. The blocks are to be awarded to those companies that offer the highest share of revenue to the government.
The Union Cabinet in September 2015 approved 69 marginal fields to be offered under the DSF Round I. Of these, 67 DSFs were clubbed into 46 contract areas and put on offer through online international competitive bidding. In March 2017, 31 contracts were signed with 22 companies, of which 15 were new entrants. Pradhan said that of the contracts awarded under round I of DSF, nine companies have already submitted field development plans and production from these fields are expected from 2021.
The Cabinet again in February, 2018 approved the second round of DSF auctions under which 60 discovered small fields with an estimated 195 million tonnes of oil and oil equivalent were to be put up for auction. Out of the 60 fields, 22 fields belong to ONGC, five to Oil India and 12 are relinquished discovered fields from the New Exploration and Licensing Policy blocks. In addition, 21 fields are the ones that did not receive any investor interest under DSF. However, the number of fields have been reduced by one to 59 to be clubbed under 25 contract areas with combined reserves of 190 million tonnes of oil and oil equivalent.
Under DSF II, larger fields compared with DSF I spread over eight sedimentary basins are on offer with an area of 3,042 sq km. Pradhan added that during the first round of auctions under DSF, national oil explorers ONGC and Oil India were asked not to participate in order to encourage new entrants.
However, “this time there is no such restriction and we want these companies also to participate whole-heartedly.” Talking about the absence of big and foreign companies staying away from DSF, Pradhan explained that it has been seen world-wide that no big companies come at the primary stage of development. DSF round II is expected to create 85,000 jobs.