Millennium Post

Norms eased to lure ‘medium’ players to 46 oil field auctions

Bidding for 46 already discovered but untapped smaller oil and gas fields will open on July 15 as the government looks to boost domestic output to cut the import dependence.

The government has abandoned decades-old regime of awarding oil and gas fields under a production-sharing contract (PSC) and instead discovered marginal fields have been offered under a revenue-sharing model, Director General of Hydrocarbons Atanu Chakraborty said here. Under the new regime, fields will be awarded to companies offering the maximum quantity of oil and gas to the government. Moving away from PSC regime would mean minimal regulatory oversight.

“There couldn’t have been a better time to invest. Oil prices are picking up and Indian energy consumption is galloping. And these are the two things an investor wants - right price and consumers for what they produce,” he said.

He said unlike rest of the world, there is no longer a scenario of over-capacity in India and demand is no longer an issue. “Most of the ingredients are in place - India offers large demand which takes care of the revenue risk. The investment risk is taken care by the offer of discovered fields where getting into production phase will take small time and cash cycle is small.
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