If the government has diluted the revenue-sharing model for hydrocarbon exploration two years after its launch, the reasons are not far to seek: In several cases, irrational bidding, quoting very high revenue share to the government, even above 90% at the peak production level during the contract period, had raised serious concerns of back-loading of production. It has been suspected that in case of category 1 fields with proven reserves, companies have aggressively bid on revenue share to get hold of the assets and then have gone slow on development plans, frustrating the government’s objective of stepping up domestic production of oil and gas.
The Centre has also been concerned about contractors not opting for the unexplored blocks in category 2 and 3 basins where they need to explore and establish the prospects.
