Speaking at the launch of the third bid round of discovered small fields (DSF), petroleum and natural gas minister Dharmendra Pradhan on Thursday said, “There will be no DSF next time.
The government has decided to auction unmonetized oil and gas fields of state-run Oil and Natural Gas Corp. (ONGC) and Oil India Ltd (OIL) to raise hydrocarbon production and improve energy security.
It would be a major round next time.” The DSF policy was adopted by the National Democratic Alliance government by leveraging the modest fields of ONGC and OIL. In the Discovered Small Field (DSF) round-III, 32 oil and gas blocks with 75 discoveries were auctioned.
These minor and marginal resources were identified by the state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL), but due to the fiscal regime and their modest size, they were not economically viable to develop. ONGC Way Forward, a seven-point action plan, was revealed by PTI on April 25.
The ministry requested that the company consider selling a stake in maturing fields like Panna-Mukta and Ratna, as well as R-Series in western offshore and onshore areas like Gandhar in Gujarat, to private enterprises, while divesting/privatizing ‘non-performing marginal fields.
There are 32 contract areas available in the third phase, totaling 75 discoveries.
These blocks cover 13,000 square kilometers and are believed to contain 230 million tonnes of hydrocarbon. The deadline for submitting bids is August 31st. 30 and 24 revenue-sharing contracts were signed in the first and second rounds, respectively. Prime Minister Narendra Modi set a goal in March 2015 of reducing crude oil import dependency by ten percentage points to 67 percent by 2022.
India will rely on imports for the foreseeable future, as indigenous production is unable to meet expanding demand. Igor Sechin, chief executive officer of Rosneft Oil Co., recently stated at the 24th St Petersburg International Economic Forum that India, the world’s third-largest oil importer, is likely to be a growth driver of global energy demand.
In a statement, the petroleum ministry said, “Pradhan advised that work on DSF be done with exponential speed and on a mission mode to monetize our natural resources for higher public welfare. According to sources, the first plan was thwarted due to significant opposition from ONGC.
The second option was presented to the Cabinet, which was resolved on February 19, 2019, to auction up 64 ONGC marginal fields. However, they claimed that the tender received a lukewarm response.
According to the sources, ONGC was permitted to keep 49 fields on the condition that their performance is closely monitored for the next three years.
