Discovered Small Field Bids: 31 Contract Areas Awarded, Estimated Revenue At Rs 46,400 Crore
Government of India today (28 March) awarded contracts of discovered small fields of Oil and Natural Gas Corporation and Oil India Limited. The contracts were awarded for 31 contract areas, 23 onshore and eight offshore, to 22 companies, of which 15 were new entrants in the business. The government has projected a revenue of around Rs 46,400 crore from these contract areas.
This step is expected to provide faster development of fields and facilitate production of oil and gas, thereby increasing the country’s energy security. These areas were discovered long ago, but the discoveries could not be monetised due to a host of reasons including their isolated locations, small size of reserves, high development costs and technological constraints.
The cumulative peak production from the awarded fields is expected to be around 15,000 barrels of oil per day and two million metric standard cubic metre per day of gas over the economic life. Of the estimated Rs 46,400 crore revenue, the government’s revenue share, according to the press release, is expected to be around Rs 9,300 crore. An added bonus is that the awarded fields will create employment for approximately 37,500 persons.
At the event, Minister of State (Independent Charge) for Petroleum and Natural Gas, Dharmendra Pradhan, said this step was taken with an objective to move further along the path of reducing India’s energy inputs by 10 per cent by 2022. He added,
In the face of a global oil glut, and oil prices at half their level three years ago, we took a bet with this bidding round for hydrocarbon assets, thereby exemplifying the boldness that is now the face of business in India. Not just that, the overall response that we received from the bid round, even from bidders who could not succeed, has been nothing short of outstanding.
Government has already begun work on a second round of bidding of discovered small fields. It will also be rolling out the Hydrocarbons Exploration and Licensing Policy through the Open Acreage Licensing mechanism soon, which will prepare the ground for higher investment in the exploration and production sector.
With Inputs From ANI.