Date of Bidding for the Auction of 46 Small Oil and Gas Fields may be Extended


As bad response, the government is likely to extend by at least one month the last date of bidding for the auction of 46 small oil and gas fields that were “given up” by state-owned ONGC and Oil India.
Bidding for the auction, the first in over four years, is to close on October 31.

There are apprehensions about the response after prospective bidders complained about the quality and amount of data being made available on the fields that have been put on offer, sources privy to the development said.

For bidders to make decisions, more data, particularly about the size of reserves, is required and making that available would require extending the deadline, they said.
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Also, some prospective bidders have raised concerns about the size of the blocks or fields on offer. They say 10 square kilometer offering, one-tenth of the smallest block ever offered in the previous bid rounds, was too small. Sources said the bidders feel the block area has to be larger to give them room for probing for oil and gas reserves.

After holding road shows in India and abroad, the Oil Ministry’s technical arm, the DGH will on October 19 hold an “outreach” even on the Discovered Small Fields Bid Round 2016 in the national capital.

A ‘Bidder Facilitation Workshop’ is planned at the event to “resolve queries of the bidders”, they said adding the extension of the bid deadline may be announced there.

The auction which was reported on May 25 is to be led on less complex authoritative terms together with evaluating and advertising flexibility.

NELP was based on Production Sharing Contract (PSC) that meant sharing of revenues with government post recovery of cost by contractor. This regime was marred by disputes over cost recovery and regulatory inflexibility.
Now the bid round is being held under a new regime that will offer discovered fields to those who offering the maximum share of oil and gas to the government.
The fields on offer hold an estimated 625 million barrels of in-place oil and gas reserves.
Sources said the 46 fields that are offered are actually 67 small and marginal discoveries that have been clubbed.
Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) “surrendered” these as they could not develop them because of huge overhead cost and uneconomic size.

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