Petroleum Ministry for awarding of discovered small fields by oil, finance ministers

In that regard, it has framed a new DSF policy which proposes to delegate the Empowered Committee of Secretaries () from ministries of Petroleum, Finance and Law to recommend the award of contracts as well as to finalise the model revenue sharing contract with the successful bidders.

The ECS recommendations should only require the approval of the Minister of Petroleum & Natural Gas and the Minister of Finance without going to the CCEA, it says.

Calling it the “country’s flagship energy policy” to reduce the nation’s energy import by 10 percent, the Ministry also proposes to introduce a new contractual regime from DSF Round-II by providing concessional royalty rates as under the Hydrogen Exploration Licensing Policy (HELP). The first round of DSF auction — launched in May 2016 — provided for royalty rates under the New Exploration Licensing Policy (NELP).

Under HELP, royalty on oil and gas from onland blocks has been retained at 12.5 per cent and 10 per cent as in the NELP but shallow water fields have to pay 7.5 per cent while deep and ultra-deep do not pay royalty for first seven years which kicks in subsequently at 5 per cent and 2 per cent, respectively.

A total of 60 fields with estimated reserve of about 194.65 million tonnes of oil and oil equivalent would be offered in the DSF Round-II of which 22 belong to Oil & Natural Gas Corp, five to Oil India Ltd, 21 leftovers from the First Round and 12 from relinquished fields or discoveries from NELP regime. Deepwater fields that could not be awarded in DSF Round-I due to lack of investor interest are not being offered in this round but would be included under Open Acreage Licensing Policy, said sources.

DSF-I had offered 67 fields of Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) — clubbed into 46 contract areas — with reserve of about 80 million tonnes of oil equivalent. A total of 30 contracts for 43 fields were signed with 20 companies after one successful bidder did not sign the contract.

The ministry has therefore proposed that companies which do not sign the contract after winning the bids would be barred from participating in future exploration and production rounds for at least two years or two future rounds, whichever is later.