The International Energy Agency (IEA) has applauded the recent auction of discovered oil and gas fields by India. In the small fields auction, which closed on November 21, 42 firms placed 134 bids for 34 contract areas out of 46 total areas on offer. In other words, nearly 73% of contract area under offer received bids.
Fatih Birol, executive director of the Paris-based organisation, wrote to petroleum minister Dharmendra Pradhan congratulating the successful first round of discovered small-fields auction under the new transparent and simplified bidding regime.
“The high number of new and private sector bidders show how an attractive bidding framework can entice companies to participate, even under difficult global market conditions, and it also stresses the strong prospects seen in the Indian upstream and downstream sector,” reads Birol’s letter to Pradhan.
IEA said that it stands with India to further intensify co-operation in the oil and gas sector, including in the areas of regional and global market outlooks, the design of market and fiscal regimes, pragmatic strategies to develop oil and natural gas resources in an environmentally responsible way and energy security and emergency policy.
In one of the most successful auction of recent times, more than 30 new companies have placed bids to grab oil and gas fields in India. Proven reserves in these fields are estimated to be 88 million tonne of oil equivalent worth over R77,000 crore at current crude oil price of $45 per barrel. Production of hydrocarbon from these fields would help India cut down imports to the tune of Rs 3,500 crore annually.
The auction is done on a new revenue sharing model where bidders have been asked to quote the revenue they will share with the government at low and high end of price and production band.
The existing oil and gas players who participated in the bidding include – Cairn India, HOEC, IOC, GAIL (India), Oil India and Bharat Petro Resources. While series of firms such as Sun Petrochemicals, Prize Petroleum, Gem Laboratories, Megha Engineering, Quippo, Oilmax Energy, Nippon Power, Invenire Energy, Ramayana Ispat, Duggar Fiber, BDN Enterprises, Mahindra Infrastructure, Akhil Teja Natural Resources, Essel Group, Gopalka Savings and Worldwide Oilfield, among others bid on the auction.
