2 DSF bids expected to raise US$7.6b in revenue

The revenue estimate is based on oil and gas reserve estimate, assumption of hydrocarbon recovery factor and sale price over a project life of 15 years

January 7, 2019

The DSF bid round I and II are estimated to have earned US$6.3 billion and US$1.3 billion, respectively

The two auction rounds allotted 55 contract ares (30 areas in round I and 25 areas in round II) to bidders

Auctions are part of effort to increase India’s domestic oil and gas output and cut import by 10% by 2022

For early monetization of assets of national oil firms, the Government has offered 127 fields under DSF

Government of India has estimated gross revenue of around US$7.6 billion from two rounds of auctions of oil and gas exploration assets under the Discovered Small Field Policy (DSF) Policy. The DSF bid round I and II are estimated to have earned US$6.3 billion and US$1.3 billion, respectively. The auctions allotted 55 contract ares (30 areas in round I and 25 areas in round II) to bidders. The revenue estimate is based on oil and gas reserve estimate, assumption of hydrocarbon recovery factor and sale price over a project life of 15 years. The auctions come as part of an effort to increase India’s domestic oil and gas production and reduce import by 10 per cent by 2022.

For early monetization of discoveries of national oil companies (NoCs), the Government has approved 127 fields for offer under the DSF Policy. These assets were awarded under a new regime of revenue sharing that provide faster development and commercialisation of fields. The policy has also helped the Government’s goal to increase natural gas’ portion in the national energy mix. The total gas accretion in India’s ultimate reserves was reported 83.7 billion cubic meter during the financial year 2017-18, while the total gas reserves of oil companies in the country was reported 23.1 BCM as on April 2018. A gas-grid is also being set up across India to boost supply.

With the aim of cutting import and boosting domestic output, the Government has sought to ease up investment in the space through policy amendments and liberalisations. India holds estimated oil and gas deposit of 28 trillion tonnes, of which 60 per cent is yet to be harnessed. While proven oil reserves stand at 635 million tonnes, proven gas deposits and estimated shale gas reserves are recorded at 54 trillion cu ft and 96 trillion cu ft, respectively. Private and foreign technology and investment has been sought for developing these resources. Apart from DSF, under the Open Acreage Licensing Programme, India has offered 69 exploration blocks to bidders.

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