After receiving 50 bids, oilfield auction deadline deferred again

50 bids were received for the second round of auctions for DSF-II oil and gas assets

At least 50 bids were received for the second round of auctions for discovered small field (DSF-II) oil and gas assets in India, for which 25 contract areas are on offer.

The major companies in fray include state-run Oil and Natural Gas Corporation (ONGC), Oil India (OIL), Billionaire Dilip Shanghvi's Sun Petrochemicals, Gautam Adani-led Adani Group and Hindustan Oil Exploration Company (HOEC).

According to industry sources, for the first time two oil majors ONGC and OIL are likely to join hands for an asset in India during the present round. Interestingly, the blocks on offer under the small field round include those relinquished by these two state-run oil majors due to viability issues.

On Thursday, the Directorate General of Hydrocarbons (DGH), that is in charge if the auctions, said that it has postponed the deadline for submission of bids for the second time. Though the initial deadline for the submission of bids was December 18, it was postponed later to January 18. "The legal team wants certain amendments on the existing contract, making it at par with the Open Acreage Licensing (OALP) rounds. The new date is likely to be January 30," said an official source. He confirmed that state-run ONGC and OIL may be in race for the 25 blocks on offer, while remained tightlipped about their possible joint bid.

The 25 contract areas on offer include 59 fields with an established hydrocarbon resource base of over 189.6 million tonne of oil or oil equivalent gas, worth around Rs 1 trillion. During the first round of DSF auctions, ONGC had opted out of the bidding.  The move by ONGC and OIL to bid for DSF-II is coming at a time when the government is mulling options to offer 149 small and marginal fields by these two state-run majors to private companies and allow state-run companies to focus on big fields only.

A similar move by the ministry of petroleum and natural gas to bring in private players in 15 producing fields of state-run companies had faced public ire last year. The new players to the hydrocarbon industry during the current round may include Antelopus Energy, a start-up founded by former Cairn Oil and Gas chief operating officer Suniti Bhat.

The Government had opted for the second round after the completion of DSF Bid Round in 2017. "This time we have larger areas on offer in already ready discovered basins. We have better fiscal offerings through revenue sharing contracts and the policy has become more investor friendly this time," he added. On January 7, the government had launched the second round of OALP auction, that is expected to bring in investments to the tune of around Rs 40,000 crore. In the current round, at least 14 blocks are on offer, with 30,000 square kilometre area on offer.