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Oil ministry keeps ball rolling for upcoming exploration rounds

Shine Jacob/New Delhi 20 Jun 17 | 01:29 AM

Minister of State for Petroleum and Natural Gas Dharmendra Pradhan

The ministry of petroleum and natural gas has started the process for an Open Acreage Licensing (OAL) round, Discovered Small Fields Bid Round–II (DSF) and Production Enhancement Contract (PEC).

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As a first step, it is set to tie up with a knowledge partner to assist the directorate general of hydrocarbons (DGH) for the coming oil and gas bidding rounds. This includes scouting for bidders - investors, exploration and production players, service companies, start-up firms, private equity and funding institutions.

The DGH has asked eight consultancy entities to apply in the selection for a knowledge partner. These are KPMG, EY, The Boston Consulting Group, PricewaterhouseCoopers, Deloitte, CRISIL, ICF International and McKinsey.

The chosen knowledge partner’s role would be to guide the DGH in conducting the OAL round, DSF-II and PEC; all three are planned soon. It would have to do a policy review, analytical and technical support related to DSF-II and PEC, and identify industry concerns. Round-I of DSF (launched in May last year) failed to attract much interest from foreign companies, despite the government having road-shows in the US, the UK, Singapore and West Asia. Only five foreign companies participated; one got awarded. And, 21 Indian entities also succeeded, making 22 in all.

“We are set to launch Round-II of DSF soon. However, the number of blocks is not yet decided. As far as DSF-I is concerned, ONGC (Oil and Natural Gas Corp) and Oil India have entered into transfer agreements with a majority of players," said an informed source.

The consultant’s role will also include maintaining of communication channels between the DGH and investors, a facilitation desk and creating a data bank on probable investors.

The ministry is already hand-holding the investors in DSF-I through setting up a committee to help these companies through the phase of environmental clearance. The blocks awarded in DSF-I are expected to reach a cumulative peak production of 15,000 barrels of oil per day and two mscmd (million standard cubic metres a day) of gas over the economic life of the fields awarded. The estimated total revenue is a little over Rs 46,000 crore.

Of this, the gross royalty collection and state royalties are expected to be around Rs 5,000 crore and Rs 2,100 crore, respectively.  The government’s revenue share would be in the range of Rs 9,300 crore.

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