Bids for 69 marginal fields to begin by Dec, says Pradhan
Mumbai: Petroleum and Natural Gas Minister Dharmendra Pradhan today said the government will open the bids for 69 marginal oil and gas fields from late November or early December and expressed confidence of getting good response from across the globe.
“I expect a good response for the 69 fields as this is for the first time that we have allowed unified licence (it be gas, oil, shale gas or CBM) apart from revenue sharing (as against the existing practise of PSC) and complete freedom of marketing the produce at market prices. We hope to invite bid either by late November or early December for these blocks,” Pradhan said after chairing a meeting of the parliamentary consultative committee of the oil ministry here.
Early this month, the government had put on block 69 marginal oil and gas fields, which have been pending for development since the 1970s. It expects to unlock Rs 70,000 crore worth energy reserves.
On September 3, the Cabinet had approved a new policy for auctioning 69 small and marginal oil fields to private and foreign companies bringing in a paradigm change in the way oil and gas blocks are developed.
The main highlight of the policy is revenue sharing instead of the present model of profit sharing and giving out unified licences for all hydrocarbons in the field instead of a licence per hydrocarbon could later be considered for the entire sector.
“We have made a paradigm shift from cost-recovery model to revenue sharing. At the same time, we have decided to implement unified licensing regime. This is a primary step towards ease of doing business,” Pradhan had said while announcing the new policy.
Of the 69 fields to be put on the block, 63 are owned by ONGC and six by Indian Oil.
“The revenue sharing and royalty sharing mechanism with the government will be benchmarked against the prevailing market price of oil on the day. If the company sells at below this price, then the sharing will still have to be done at the market price. If the company manages to sell at a higher price than the market rate, then the sharing will be based on this higher price,” he had added earlier.