Oil ministry keeps ball rolling for upcoming exploration rounds
The ministry of petroleum and natural gas is set to hire a consultant to assist the sector regulator for the upcoming oil and gas bidding rounds under the Open Acreage Licensing (OAL), Discovered Small Fields Bid (DSF) and production enhancement contract (PEC) policies.
The rounds will include scouting for potential bidders including investors, exploration and production players, service companies, start-up firms, private equity and funding institutions across the world.
The knowledge partner would guide the directorate general of hydrocarbons (DGH) in conducting bidding rounds. The move comes after the first round of DSF failed to attract interests from overseas companies despite road shows by the government in the US, UK, Singapore and West Asia. Only five foreign companies participated in the current round, and only one was awarded the block.
The eight consultants, invited by the DGH to bid are KPMG, EY, Boston Consultancy Group (BCG), PricewaterCooperhouse (PwC), Deloitte, CRISIL, ICF International and McKinsey. The knowledge partner will have to come up with policy review, analytical and technical support related to DSF II and PEC and should also identify industry concerns. “We are set to launch the round II of DSF soon. However, it is not yet decided on the number of blocks. As far as DSF I is concerned, ONGC and Oil India have entered into transfer agreements with a majority of players,” said a source close to the development.
The consultant’s role will also include maintaining communication channels between the DGH and investors and also setting up of a facilitation desk that will create a data bank on probable investors. The Dharmendra Pradhan-led ministry is already handholding the investors in DSF I round by setting up a committee to help the new companies through the phase of environmental clearance. The blocks awarded in DSF round I, which was launched in May last year, expects a cumulative peak production of 15,000 barrels of oil per day and two mscmd (million standard cubic metres a day) of gas over the life of the fields awarded.
The estimated total revenue is a little over Rs 46,000 crore. Of this, the gross royalty collection and state royalty are expected to be around Rs 5,000 crore and Rs 2,100 crore, respectively. The government’s revenue share would be in the range of Rs 9,300 crore.
Source: Business Standard