Government will auction 69 small and marginal oil and gas fields taken away from state-run ONGC and Oil India to private firms on a new revenue sharing model, offering operators full marketing and pricing freedom.

Highlights

• The fields hold 89 million tonne of oil and gas resources which are worth Rs 70,000 crore at current prices. The 69 fields will be clubbed into clusters and offered for bidding within 3 months, Oil Minister Dharmendra Pradhan said.
• They will be bid out on the basis of revenue share or the share of oil and gas a bidder offers to government upfront. Besides offering minimal interference in operations of the field, the government will allow companies to sell oil as well as natural gas produced from these fields at market price and with no restriction on who they sell the produce to, Pradhan said.
• In all Oil and Natural Gas Corp (ONGC) has 110 small and marginal oil and gas discoveries in the blocks or areas it got from government on nomination basis.
• Of these, the company has been allowed to retain 47 where some work has been done and rest have to be surrendered. Oil India Ltd has surrendered all of its 6 small and marginal discoveries.
• An Oil Ministry official said ONGC and OIL will be reimbursed the cost they had incurred on these 69 fields by the new operator.
• Operators of onshore fields will have 3 years to begin production while they will have 4 years from the date of signing contract to start output from offshore fields. The timeline for starting production from the two deepsea fields is 6 years.
• 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.