India’s first bid round to implement its new Hydrocarbon Exploration Licensing Policy (HELP) may also offer some of the discovered small fields (DSF), if there are no takers for them. With the nine bid rounds under the New Exploration Licensing Policy unable to attract the desired level of investments, the National Democratic Alliance government approved marketing freedom for crude oil and natural gas under HELP in March this year. These discovered fields were earlier held by state-run Oil and Natural Gas Corp. Ltd (ONGC) and Oil India Ltd. DSF bidding was launched in New Delhi on 25 May 2016.
Under this round, India is offering 46 contract areas with 67 oil and gas fields, estimated to hold over 625 million barrels of oil and oil equivalent gas in-place, spread over 1,500 sq. km. “If there are discovered small fields that remain unsold after the bids, they shall be added with the fields under HELP,” said a petroleum ministry official requesting anonymity. With bid submission deadline for discovered small fields extended, first round under HELP may be delayed. Another government official, who also did not want to be named, confirmed the development.
The first bid round under HELP will mark the culmination of the government’s bet for a revenue-sharing model from the controversial cost-recovery model which involves cost recovery by firms before the government receives its share of the revenue. Also, state-run ONGC is betting on its relinquished blocks under HELP. Experts concur with the government’s strategy. “The discovered small fields have been the government’s primary concern after which it shall concentrate on HELP. With fields remaining unsold they have to find a way to utilise them,” said Sanjay Grover, partner at EY, a consultancy.
Queries emailed to a petroleum ministry spokesperson on 8 October remained unanswered. This comes in the backdrop of India’s stagnant hydrocarbon production. The government has made energy security one of the primary areas of focus in its economic policy in order to achieve fast and sustainable long-term development. India has 26 sedimentary basins covering an area of 3.14 million sq. km, out of which seven basins have established commercial productions in progress. India has a total reserve of 763.476 million tonne of crude oil and 1,488.73 billion cu. metre of natural gas. DeSean Jackson JerseyShare This