- The government will soon auction 69 small and marginal oil fields of state-owned ONGC and Oil India to private firms as a precursor to a full fledged licensing round.
- The Oil Ministry has floated a note for Cabinet Committee on Economic Affairs (CCEA) for auctioning of the fields that state-owned firms are surrendering because they were uneconomical to develop due to government’s subsidy sharing mechanism.
- ONGC has surrendered 63 discovered oil and gas fields which it had found uneconomical to develop considering small reserve size and high economic cost as it had to pay for fuel subsidies from the hydrocarbons produced from it. Oil India Ltd (OIL) has surrendered six such fields.
- The fields will be bid out on the basis of revenue share or the share of oil and gas a bidder offers to the government upfront, and work programme.
- Companies offering the maximum revenue share or percentage of oil and gas to the government, and committing to do more work will win the field.
- The weightage for revenue share will be 80 per cent while 20 per cent would be for work programme that may include drilling of exploratory and development wells and seismic studies.
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