Bidding for DSF-III round to start on February 1, says DGH

From the previous two bid rounds, 29 field development plans entailing $1.76 billion investment have been submitted

Bidding for 75 small and marginal oil and gas discoveries, mostly of ONGC, that are being offered in the DSF-III bid round, will begin on February 1, 2022, the DGH said on Monday.

The third bidding round under the Discovered Small Fields policy, DSF-III, was launched on June 10, 2021. The original deadline for submission of bids was August 31, 2021. However, this was postponed to October 29. It was again put off without giving reasons.

"Bid submission for DSF Bid Round-III will start on February 1, 2022, and end on March 15, 2022," the Directorate General of Hydrocarbons (DGH) said.

DSF-III offers 32 contract areas, comprising 75 fields/discoveries, with a combined total area of more than 13,000 square kilometers, in nine sedimentary basins. The fields on offer include a few of the nomination fields of National Oil Company, Oil and Natural Gas Corporation Limited, and some of the relinquished/unmonetized discoveries.

According to the DGH, the 32 offered contract areas have a total resource potential of around 230 million tonnes of oil equivalent (MMtoe)/1.7 billion barrels (oil & oil equivalent of gas (OEG)).

The government introduced DSF in October 2015 to monetize unmonetized discoveries of state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL). Under the DSF policy, two bid rounds in 2016 and 2018 have been conducted wherein 54 Contract Areas with 101 fields were offered.

The offered discovered fields include 54 in shallow water, 2 in deepwater, and 19 are on-land fields. These small and marginal fields were discovered by ONGC and OIL but they were not economically viable to be developed due to the fiscal regime and their small size.

Under DSF, liberal terms including pricing and marketing freedom are offered, making them viable. Also, it is based on a revenue-sharing model, a single licence for hydrocarbon resources, no cess, full gas pricing freedom, and no riders for foreign companies/joint ventures.

From the previous two bid rounds, 29 field development plans entailing USD 1.76 billion investment have been submitted, according to the DGH.

Oil production from the areas awarded in two rounds of DSF is envisaged to reach 1.3 million tonnes by 2024 and gas output to touch 2.9 billion cubic meters, it said.

India, the world's third-biggest crude importer and consumer, has been pursuing a policy to promote domestic oil and gas production through a host of investor-friendly policy initiatives aimed to cut its import dependence to meet energy demand. The nation meets 85 per cent of its domestic oil demand through imports.