KOLKATA (miningweekly.com) – India will commence with road shows in the next month to woo domestic and foreign investors to participate in the auctions of marginal oil and gas fields across the country.
An inter-Ministerial group led by the Petroleum and Natural Gas Ministry was expected to meet early next week to finalise the destinations and scheduling of the road shows, as well as the timelines for the auction of 67 oil and gas fields, according to a senior government official.
Most of these marginal oil and gas fields had been either lying idle or underdeveloped by national exploration and production majors, such as ONGC Limited and Oil India Limited (OIL), as the companies considered these to be unviable and located in challenging geographies.
The official said that a few of the 67 oil blocks would be clubbed together based on the location and size of the reserves to give prospective bidders the option to bid for one or more of the blocks, depending on their assessment of economic viability.
The auction of the marginal blocks would also be a test case for the Indian government’s Hydrocarbon Exploration and Licensing Policy (HELP), unveiled in March 2016.
The highlights of the new policy included the introduction of revenue-sharing contracts with the government to replace the earlier profit-sharing contract model; open acreage licensing; and, most importantly, marketing and pricing freedom for crude oil and gas produced from these marginal fields.
Under HELP and a uniform licensing system, all hydrocarbons, oil and gas, and coalbed methane, would be covered under a single licence and contracts would be based on biddable revenue sharing. Bidders would be required to quote revenue share in their bids, which would be a key parameter for selecting the winning bid.