India offers 67 discovered small fields under new revenue sharing policy

The government is offering 67 discovered small fields with 85 million metric tonnes of known discoveries, worth over Rs77,000 crore, in 46 contract areas spread over 9 sedimentary basins in onland, shallow water and deep water areas, for bidding under a revamped New Exploration Policy.

The bidding for the 'Discovered Small Field Bidding Round – 2016', which will be launched tomorrow, allows entrenched players, start-up firms and new players with little experience in operating hydrocarbon blocks to bid for the 67 discovered marginal oil and gas fields.

These small fields have been discovered by national oil companies and are now being offered under exclusive Discovered Small Field Policy, which is designed to be investor friendly and is based on easy-to-administer revenue sharing contract model.

The amended New Exploration Policy is in tune with the government's policy of 'Ease of doing business' in India. This is a path-breaking initiative in the series of progressive policies being undertaken by government of India in the oil and gas sector, says an oil ministry release.

These small fields together have more than 85 million metric tonnes (MMT) of in-place volume of reserves worth over Rs77,000 crore, at current crude oil prices, and are being offered in a revised business model under the revenue sharing contract.

It will involve international competitive bidding with no mandatory domestic participation. There is no mandatory prior technical experience required for the bidder nor is there any mandatory work programme. There will be no cess, and minimal royalty is in line with earlier New Exploration Licensing Policy.

Goods and services imported for petroleum operations will be exempted from custom duty. The investors will not only get an opportunity to enter in Indian upstream market but will also experience freedom for pricing and marketing of crude and gas on arms length basis. The contract extension clause is generous and there will be no restriction on exploration during the contract period. Roadshows are being planned in India and abroad to attract investors for the bidding round.