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Vedanta, ONGC, 37 others put in 145 bids in oilfield auction


Press Trust of India New Delhi
As many as 39 firms, including six foreign players, Wednesday put in 145 bids for 24 out of the 25 oil and gas fields on offer in the second round of bidding for discovered small fields in India, with mining giant Vedanta placing offer for the maximum 21 fields.
At the close of bidding for the second round of Discovered Small Fields (DSF), state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) placed bids for 10 fields each while Indian Oil Corp (IOC) bid for 3, according to upstream regulator DGH.
British company Soco International made its foray into India, bidding for one field while little known Arch Softwares put in bids for 15 fields.
Vedanta, which had walked away with 41 exploration blocks of the 55 on offer in a separate open acreage licensing round last year, bid for 21 fields in DSF-II. It was the sole bidder in one field.
The 25 contract areas on offer covered 59 discovered oil and gas fields, spread over 3,000 square kilometers with a prospective resource base of over 190 million tonne (MT) of oil and oil equivalent gas, DGH said in a statement.
"Directorate General of Hydrocarbons (DGH) received 145 e-bids for 24 out of 25 contract areas under the DSF Bid Round-II by the deadline of 1200 Hours on January 30, 2019," it said.
Out of the total 145 e-bids received, 103 were received for onland contract areas and 42 for offshore contract areas.
"As many as 39 companies (individually or as a member of the bidding consortium) have participated in the bid round. The response to the DSF Bid Round-II has been overwhelming as compared to the last round of DSF in 2016. Out of 25 contract areas on offer, 15 are onland and 10 are in shallow offshore areas," DGH said.
All the 15 onland contract areas received bids while 9 out of 10 offshore contract areas have received bids.
"Six foreign companies have also submitted the bids. This bid round saw more than anticipated participation from new entrants from India and foreign countries like the US, UK, Australia, Singapore and the UAE," it said without giving details.
The fields would be awarded by end of February 2019, so as to expedite the monetisation of the hydrocarbon production from these fields, it said.
In 2016, the government brought in a new DSF policy wherein 'idle' small discovered fields of ONGC and Oil India were taken away from them and auctioned to private players on liberalised terms including marketing and pricing freedom and lower taxes.
ONGC and OIL say they have not been able to develop the fields due to their small size, and the current capped prices are making their development unviable. Private companies will, however, get full pricing and marketing freedom.
Oil Minister Dharmendra Pradhan had last month told Parliament that ONGC had spent Rs 12,826 crore and OIL another Rs 224.27 crore on the 115 oil and gas discoveries that were taken away from them by the government for auctioning to private companies under DSF bid rounds.
Under the DSF bid round-I in 2017, 67 discoveries were mostly of ONGC.
ONGC and OIL are not compensated for the amount they had spent on discoveries of these oil and gas reserves. Unlike state-owned firms, the private players are allowed pricing and marketing freedom to make these discoveries viable. The two PSUs have previously stated that they could not produce from the discoveries as they are uneconomically at current cap prices.
The 67 discoveries under the DSF bid round-I are estimated to have in place reserves of 86 MT of oil and gas equivalent.
In the DSF round-I, a total of 134 bids were received for 34 blocks out of 46 on offer.
"The production from areas offered in DSF-I is likely to start as per contract timelines in 2019-20 and now DSF-II areas follow, as a continuum, to add up to the domestic production and increasing the numbers of oil and gas operators in the country," DGH said in the statement.
DGH officials said the main features of DSF-II include a single licence for exploitation of both conventional and unconventional hydrocarbon, prior technical experience not a pre-qualification criterion, no upfront signature bonus and full pricing and marketing freedom. Royalty rates have been reduced to 7.5 per cent from 10 per cent for offshore blocks.

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First Published: Jan 30 2019 | 7:40 PM IST

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