Coal News We love to talk!
The government is identifying the small and marginal oil and gas fields it plans to auction in coming months to boost domestic production, Oil Minister Dharmendra Pradhan said today.
State explorers ONGC and Oil India will surrender those small and marginal fields that they are unable to produce from due to economic size or operational issues. These fields will be demarcated into areas for auction.
"We are identifying marginal fields for auctioning in a transparent process," he said at 13th Petro India Conference, organised by India Energy Forum and ORF, here.
As many as 63 discovered oil and gas are being surrendered by state-owned Oil and Natural Gas Corp (ONGC) as they were found to be uneconomic for a large firm with huge overheads to develop or bring to production. Smaller firms with a fraction of operating cost can develop them at much faster and economic rate.
Oil India Ltd (OIL) will surrender 6 marginal fields. Pradhan said the fields that ONGC and OIL are surrendering are the ones where they have not been able to start production.
"It is not as if we are asking them to do so (surrender). They themselves are giving up these fields which they had in first place got on nomination basis much before the advent of New Exploration Licensing Policy (in 1999)," he said.
The auction would be on a new revenue sharing model. Under the revenue sharing model, bidders will have to upfront state how much oil and gas they will share with the government. The firm offering maximum win the right to explore and produce from the field.
This is a shift from the much-criticised Production Sharing Contract (PSC) regime where blocks were allocated to firms that bid highest amount of work in the area.
It allowed the firms to recover all their cost before sharing profits with the government, a regime which was criticised by CAG as one that provides incentive to operators to keep raising cost so as to postpone government share.
"It's a win-win for all... the companies and the government benefit and production increases," he said.
ONGC holds about 165 marginal fields (79 offshore and 86 onshore). 63 of these are being surrendered for auction.
Marginal fields were given to ONGC before the licensing rounds on nomination basis. Hydrocarbons resources are locked up in these fields, but they cannot be produced economically on a standalone basis, or with a conventional approach.
Of the 165 fields, with total ultimate reserves of 340 million tons, operations are going on in 139 and work is yet to start on 26.
- ONGC targets 55m units of gas by 2016; hopes to finalise equity deal by month end Read more
- Air Pollution claiming a life every 23 seconds in India Read more
- India an attractive LNG spot market: Experts Read more
- BHEL inks three strategic pacts in Kazakhstan Read more
- ONGC, Ecopetrol reach deal for oil exploration Read more
- Solar projects in Maharashtra receive Rs 4.42 per unit bid Read more
- IOC to buy up to 50 per cent stake in Adani Group-backed Mundra LNG terminal Read more
- GSPC Gas, Gujarat Gas amalgamation complete Read more
- Oil companies get nod to increase kerosene price by 25 paise every month till April 2017 Read more
- Solar power installations cross 3,000-MW mark Read more