In order to speed up production from the areas lying idle for years, the government has kicked off bidding process for the second round of discovered small fields (DSF-II). In this round, 59 marginal hydrocarbon discoveries holding resources worth Rs 1 lakh crore have been put up for auction as compared with Rs 34,600 crore worth of resources offered in the DSF-I last year, said oil minister Dharmendra Pradhan.
In the first round of auction, the government had expected to auction about 86 million tonnes of oil and oil equivalent gas reserves and managed to award 45 million tonnes. The fields on offer in DSF-II are 15 onland fields and 10 shallow water areas and hold about 190 million tonnes or 1.39 billion barrels of oil and oil equivalent gas.
The contracts are expected to be awarded in January next year and last date for bidding is December 18, 2018. DSF-II is expected to provide employment to about 85,000 people, said Pradhan, while speaking at the launch.
The government hopes to receive approximately Rs 45,000 crore in royalty, taxes and profit petroleum over the life of the fields, if all fields are bid out, as compared with Rs 9,000 crore of anticipated revenue from the first round of DSF auction.
In order to attract investors, the royalty rates have also been cut to 7.5% from 10% earlier for offshore blocks.
Earlier, the government had decided to put up 60 discoveries to be clubbed into 26 contract areas spread over 3,100 sq km. However, it later reduced the offer to 25 areas and 59 discoveries due to some technical difficulty.
In the first round of auction, state-run firms ONGC and Oil India were not allowed to take part, so as to encourage new players. However, there is no such restriction this time and all these companies can participate, he added.