DSF II auction draws 145 bids for 24 contract areas

The bid round–II under the Indian Government’s Discovered Small Field Policy, held in August 2018, attracted 145 e-bids submitted by 39 companies for 24 contract areas (58 oil/gas discoveries) on offer

January 30, 2019

The DSG Bid-II assets, spread across 3,000 sq km, are estimated to hold hydrocarbon reserves of over 190 million tonnes and worth around US$14.3 billion

The 39 bidders included six foreign firms from US, UK, Australia, Singapore and UAE, along with 28 private firms from India, including new entrants

India is the 3rd largest energy consumer in the world; Energy consumption is expected to grow by 4.2 per cent annually - faster than all major economies

According to the International Energy Agency (IEA), India is expected to account for almost one-third of the global growth in energy demand by 2040

A second round of auction of upstream oil and gas assets under the Indian Government’s Discovered Small Field Policy, launched in August 2018, has attracted strong investor interest. As many as 145 e-bids have been submitted by 39 companies for 24 contract areas, representing 58 oil and gas discoveries, that were put on offer, according to an official statement on January 30. The assets, spread across 3,000 sq km, are estimated to hold hydrocarbon reserves of over 190 million tonnes and worth around US$14.3 billion. A total of 25 contract areas with 59 discovered oil and gas fields were put on auction.

Out of 25 contract areas on offer, 15 are onshore and 10 are in shallow offshore areas. All the 15 onshore contract areas received ebids while 9 out of 10 offshore contract areas have received e-bids. Out of total 145 e-bids received, 103 e-bids were received for onshore contract areas and 42 e-bids were received for offshore contract areas. The 39 bidders included six foreign firms from US, UK, Australia, Singapore and UAE, along with 28 private firms from India, including new entrants. The DSF-II assets are estimated to produce up to 15,000 barrels per day of crude oil and 2 million cu meters per day of natural gas.

The Government aims to award the contract areas by the end of February 2019, to expedite monetization of hydrocarbon production from these fields. In the bid round–I in 2017, 46 assets were offered, out of which 34 had received more than 130 bids. The production from areas offered in DSF-I is likely to start as per contract timelines in 2019-20, and along with output from DSF-II areas, will boost India’s domestic oil and gas production. India holds estimated oil and gas reserves of 28 trillion tonnes, out of which 60 per cent in yet to be harnessed. Since 2000, more than 250 upstream blocks have been allotted to bidders.