The Directorate General of Hydrocarbons (DGH), an arm of the petroleum and natural gas ministry, will hold a match-making event in Delhi on October 19 to bring capital providers, technology providers and oilfield service providers on one platform so that they can jointly bid for these fields.
According to DGH estimates, these fields hold in-place reserves of 86 million tonnes of oil equivalent, with estimated recoverable reserves of roughly 30 million tonnes, based on a revenue-sharing contract model. The government has extended the date of submitting bids from October 31 to November 21, stating the last roadshow in Bengaluru took place on October 15 and investors would get only a week’s time to submit bids.
“Many start-ups and private equity players have shown interest in bidding for the blocks. They have money to invest, what they lack is expertise in the field. We want to introduce other service providers to them so that they all can jointly bid for the blocks,” said a source close to the development.
This development comes at a time when there are reports the ongoing bidding process has failed to interest major global players. Besides, state-run ONGC and Oil India have decided to stay away from the ongoing auctions. Petroleum minister Dharmendra Pradhan said recently, “These fields are too small. They are looking at bigger investments.”
The initiative coincides with ONGC and Oil India launching start-up funds of Rs 100 crore and Rs 50 crore, respectively.
The two companies will provide seed capital, mentoring, market linkage and follow-up to startups.
The government has conducted roadshows in the US, the UK, Singapore and West Asia. More than 12 firms in the oil and gas service sector have purchased data about the blocks.
Companies that win onshore fields must start production within three years, while those that win shallow water and deep water blocks must start production in four and six years, respectively.