Govt to auction 27 oil fields off Mumbai, 15 in KG basin

New Delhi :More than a third of the 69 small and marginal oil and gas fields that the government plans to auction to private firms are in Mumbai Offshore and the biggest of them holds about 15 million tons of oil reserves.

Of the 69 idle oil and gas fields of state-owned ONGC and Oil India Ltd which are to be auctioned, 27 are in Mumbai Offshore while another 15 are in the prolific Krishna Godavari (KG) basin, official sources said.

As many as 10 discoveries in the Assam Shelf are also on offer.

The discoveries, which the government says were given up by the two oil companies as they were unable to develop them for varied reasons, include ones made as late as 2012-13.

In all, seven marginal discoveries of ONGC date back to less than five years, with 2012-13 Koravaka gas field in KG basin being the youngest. An equal number of finds were made between 2005-06 and 2008-09.

While cumulatively the surrendered small and marginal fields hold about 50.8 million tons of oil and 53.45 billion cubic meters of gas, the biggest discovery is the D-18 in Mumbai Offshore that along holds 14.78 million tons of inplace oil reserves.

Among the gas discoveries, the largest is ONGC’s B-9 find in the offshore Kutch basin that has an inplace reserve of 14.67 bcm.

Sources said while Oil and Natural Gas Corp (ONGC) has surrendered 63 discoveries, OIL has given up six all of whom are in Assam Shelf.

The 69 fields will be grouped with those lying adjacent clubbed to form on unit. So far the clubbing has brought down the number of fields to be offered in the auction to 48, they said adding the final number of offer may be a little lower.

The auction will be done on a new revenue sharing model where bidders will be asked to quote the revenue they will share with the government at low and high end of price and production band.

This would help the government capture windfall of steep rise in prices as well as quantum jump in production.

The new revenue sharing regime will replace the controversial Production Sharing Contract (PSC) model where oil and gas blocks are awarded to those firms which show they will do maximum work on a block.

The PSC regime allowed all their investments to be recovered from sale of oil and gas before profits are shared with the government. This model was criticised by CAG which said it encouraged companies to keep raising cost so as to postpone higher share of profits to the government.