DSF Round-III: India Offers 75 Discovered Oil And Gas Blocks Across 32 Sites For Development, Bids Open On Feb 1

With the objective to augment domestic production of crude oil and natural gas, the government of India has announced that it will be offering 75 oil and gas tracts to potential investors as part of third discovered small fields (DSF) bid round.

This will be country's largest-ever such offering encompassing existing discoveries by Oil & Natural Gas Corporation Ltd (ONGC), Oil India Ltd (OIL) and others.

The government will invite oil and natural gas companies to bid for development and monetising 32 contract areas comprising 75 Oil and Gas fields. Out of the 75 fields, 11 are located in on land, 20 are located in shallow water offshore and 1 is located in deep-water.

According to the Directorate General of Hydrocarbons (DGH), the 32 offered contract areas have a total resource potential of around 230 million tonnes of oil equivalent (MMtoe)/1.7 billion barrels (oil & oil equivalent of gas (OEG)).

Bid submission for DSF bid round-3 will start on 1 February 2022 and end on 15 March 2022

Companies, either alone or as a consortium or operating as joint ventures, will be allowed bid for one or more contract areas.

Discovered small fields shall be awarded to successful bidder by entering into a Revenue Sharing Contract (RSC) with the government.

The successful bidders will be required to commence commercial production from the contract area within 3 years in case of onland, 4 years in case of shallow water Contract Areas and 6 in case of deep water.

The development of oil and gas field is viewed as key initiative to achieve Prime Minister Narendra Modi’s vision to reduce oil imports by as much as 10% during the next few years.

To attract global interest, the government will offer single License for conventional and un-conventional hydrocarbon, will not be charging any upfront signature bonus, will allow exploration during entire contract period, will provision for sharing of common facilities. It will also allow full pricing and marketing freedom.

On the onshore front, blocks have been offered in the Assam Arakan belt, Rajasthan, Cambay, Vindhyan and the Krishna Godavari basins. The other offshore basins that will be available for bid in this round include Cauvery, Cambay basin, Kutch basin, Mumbai offshore basin, Rajasthan basin, Vindhya basin and the Krishna Godavari basins.

The earlier Discovered Small Fields (DSF) Bid Round-II culminated on 7 March 2019 when the contracts of the blocks were signed between Government of India and the respective winners in New Delhi.

The Government received a very good response in the DSF Round-II. Total 59 discovered oil & gas fields covering an area of 3,042 Sq Km and having a prospective resource base of 190 MTOE (Million tonne of oil and oil equivalent gas) were offered through 25 contract areas.

Total 145 e-bids were received from as many as 40 companies- participating singly as well as through consortium

3 PSUs companies -Indian Oil Corporation Ltd, Oil India Limited and Oil and Natural Gas Corporation Limited, were awarded contract areas in DSF Round-II. The following 11 private companies also were awarded areas for development

1. Arsh Corporate Services Private Limited

2. Invenire Energy Private Limited

3. Hindustan Exploration Company Oil Limited

4. Shanti G.D. Ispat and Power Pvt. Ltd.

5. Bagadiya Brothers Private Limited

6. Shanno Business India Private Limited

7. Vedanta Limited

8. Ganges Geo Resources Private Limited

9. Keerthi Industries Limited

10. Gem Petro E&P Private Limited

11. Arch Softwares Private Limited

The government introduced DSF in October 2015 to monetize unmonetized discoveries of state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL). Under the DSF policy, two bid rounds in 2016 and 2018 have been conducted wherein 54 Contract Areas with 101 fields were offered.

The offered discovered fields include 54 in shallow water, 2 in deepwater, and 19 are on-land fields. These small and marginal fields were discovered by ONGC and OIL but they were not economically viable to be developed due to the fiscal regime and their small size.

From the previous two bid rounds, 29 field development plans entailing USD 1.76 billion investment have been submitted, according to the DGH.

Oil production from the areas awarded in two rounds of DSF is envisaged to reach 1.3 million tonnes by 2024 and gas output to touch 2.9 billion cubic meters, it said.

India, the world's third-biggest crude importer and consumer, has been pursuing a policy to promote domestic oil and gas production through a host of investor-friendly policy initiatives aimed to cut its import dependence to meet energy demand. The nation meets 85 per cent of its domestic oil demand through imports.

(With inputs from PTI)