The Government plans to soon auction 69 small and marginal oil fields belonging to State-owned ONGC and OIl to private firms, which could be a prelude to a full fledged licensing round, Petroleum Secretary Saurabh Chandra said on Tuesday.
“Marginal field policy will have approval soon and 69 fields, which ONGC and OIl very happily have given up, will be put (up for bidding). We hope to put them out to bidding soon,” he said at FICCI Roundtable on Hydrocarbons.
The Petroleum Ministry has floated a note for Cabinet Committee on Economic Affairs for auctioning of the fields that State-owned firms are surrendering because they were uneconomical to develop due to Govt's subsidy sharing mechanism. The fields will be bid out on the basis of revenue share or the share of oil and gas a bidder offers to the Government upfront, and work programme, he said.
Companies offering the maximum revenue share or percentage of oil and gas to the Govt, and committing to do more work will win the field. The weightage for revenue share will be 80 pc while 20 pc would be for work programme that may include drilling of exploratory and development wells and seismic studies.
“Once new model gets approval, we will soon have NElP-X,” Chandra said. So far, 254 blocks for exploration and production of oil and gas have been auctioned in nine rounds of New Exploration licensing Policy (NElP) since 1999. These have been on production sharing basis where profit is shared with the Government after recovery of cost.
The Secretary observed that revenue sharing is a better model as under it bidders upfront bid the percentage of production they will share with the Government.