Govt to auction 28 oil, gas blocks off Mumbai; 14 in KG basin

As many as 28 oil and gas fields out of the 69 small and marginal fields of state-owned firms that the government plans to auction to private players are in Mumbai offshore, Oil Minister Dharmendra Pradhan said today.

Of the 69 idle oil and gas fields of state-owned ONGC and Oil India Ltd which are to be auctioned, 28 are in Mumbai Offshore while another 14 are in the prolific Krishna Godavari (KG) basin, he said in a written reply to a question in Lok Sabha here.

As many as 10 discoveries in the Assam shelf are also on offer.

The discoveries, which Pradhan said were given up by the two oil companies, include ones made as late as 2012-13.

"The Government has made this (Marginal Field) policy with sole objective to bring unmonetised marginal fields of ONGC and OIL to production at the earliest. Inplace reserves in these identified discoveries/fields constitute about 1 per cent (88 million tons) of total inplace reserves (8657 million tons) of oil and oil equivalent gas held by ONGC and OIL as on April 1,2 014," he said.

Giving details of the fields to be offered in the round, he said, seven marginal discoveries of ONGC date back to less than five years, with 2012-13 Koravaka gas field in KG basin being the youngest. An equal number of finds were made between 2005-06 and 2008-09.

The biggest discovery among the lot is the D-18 in Mumbai Offshore that along holds 14.78 million tons of inplace oil reserves.

Among the gas discoveries, the largest is ONGC's B-9 find in the offshore Kutch basin that has an inplace reserve of 14.67 bcm.

While Oil and Natural Gas Corp (ONGC) has surrendered 63 discoveries, OIL has given up six all of whom are in Assam Shelf.

Spelling out salient features of the Marginal Field Policy, he said, the auction will be done on a new revenue sharing model where bidders will be asked to quote the revenue they will share with the government at low and high end of price and production band.

The new revenue sharing regime will replace the controversial Production Sharing Contract (PSC) model where oil and gas blocks are awarded to those firms which show they will do maximum work on a block.

The PSC regime allowed all their investments to be recovered from sale of oil and gas before profits are shared with the government. This model was criticised by CAG which said it encouraged companies to keep raising cost so as to postpone higher share of profits to the government.

Also, single license for exploration and exploitation of conventional and non-conventional hydrocarbons will be issued and operators will have freedom to sell oil and gas on arms on arms length market price, he said adding there would be no cess on crude oil.