India to switch to revenue-sharing contracts at oil field auction next month

KOLKATA (miningweekly.com) – India to Inaugurate Transition to Revenue Sharing Contracts and Scrap Production Sharing Contracts (PSCs) When Government 60 Bids Discover Small Petroleum Fields next month

22 fields owned by ONGC oil and gas (NGO), five to Oil India, 12 previously awarded to E & P companies but abandoned after failing to develop them and 21 that were put at auction earlier, but failed to attract bids

The transition to new revenue-sharing contracts has been significant, as national accounts auditors have been criticized, including by National auditors and the Auditor General, accusing E & P companies of increasing development costs

. that the E & P companies inflate the development costs and recover a higher amount through the sale of oil and gas and that this has led to a decline in profits, which had to be shared by the government. Under the new revenue – sharing agreements, exploration and production companies should base their bids on the amount of revenue that they would allocate to the government within the limits of a price and price. a production range the oil and gas blocks allocated, officials said explain the new contract model.

In another first, a successful bidder would obtain a compound license allowing the investor to explore, develop and produce all conventional and unconventional forms of oil. The government changed the legal definition of "petroleum" under existing rules and laws to facilitate the granting of a composite license

. The Gas Ministry amended the 1959 Petroleum and Natural Gas Rules to indicate that "oil would mean all natural hydrocarbons, in the form of natural gas, or liquids, viscous. However, it has been clarified that the new definition of oil would not include coal, lignite or helium that could appear with the expanded definition of petroleum products in the English version.

In a relaxation of the eligibility criteria, the auction notification reveals that no prior experience with oil and gas exploration was required for the purpose of the auction. an investor submits his bid.