The Narendra Modi government will on Thursday launch its first auction of oil and gas acreages, where around 80 chief executives of global firms are likely to participate in bidding for 67 blocks with 85 milion tonne reserves worth Rs 77,000 crore.
“Under the Discovered Small Field Policy, the government is offering 67 fields in 46 contract areas spread over nine sedimentary basins in onland, shallow water and deep water areas which have known hydrocarbon discoveries,” the petroleum ministry said.
The companies will have time till October 31, 2016 to submit bids for the blocks online through e-bidding portal www.mstcecommerce.com and the bids will be opened the same day, the ministry said in a newspaper advertisement. A company may bid for one or more blocks alone or with other companies through a venture.
Successful bidders would be required to enter into a Revenue Sharing Contract (RSC) based on the model RSC worked out by the government. Bids will be evaluated based on the biddable work programme and biddable revenue share offered to the government, which will carry 20 points and 80 points, respectively, for evaluation.
The process will involve international competitive bidding with no mandatory domestic participation. There will be no mandatory prior technical experience required for the bidder, no mandatory work programme commitment and no cess. However, production from the blocks would attract minimal royalty in line with the existing New Exploration and Licensing Policy (NELP).
“Goods and services imported for petroleum operations will be exempted from customs duty. Investors will not only get an opportunity to enter the Indian upstream market but will also experience freedom for pricing and marketing of crude and gas on arms length basis,” the ministry said. It added that the provision for contract extension applicable for the small discovered fields will be “generous” and there will be no restriction on exploration during the contract period.
The government is planning to conduct roadshows to woo global investors in places like Singapore, Houston, London, Dubai, Calgary and Perth for India’s first oil and gas auction since 2012.
Apart from CEOs of big companies, embassiy personnel are also likely to attend the launch of the bidding by Petroleum Minister Dharmendra Pradhan, according to the Directorate General of Hydrocarbons. Global accounting and consultancy firm KPMG has been chosen to advise on the bidding round and manage the roadshows.