Vedanta submits most bids in India’s DSF-II round

06 February 2019, Week 05, Issue 661

Vedanta and several smaller private players have emerged as the primary bidders in India’s second discovered small fields (DSF-II) auction.

A total of 39 companies – 28 domestic, six foreign and five state firms – participated in the auction for the 25 contract areas, upstream regulator the Directorate General of Hydrocarbons (DGH) said. In all, 145 bids were received, including 103 for onshore contract areas and 42 for offshore.

The fields, which include 15 onshore and 10 shallow-water fields – are anticipated to be awarded by the end of this month. The 25 contract areas cover 59 discovered oil and gas fields spread over 3,000 square km, with a prospective resource base of more than 190 million tonnes of oil equivalent (1.39 billion boe).

“The response to the DSF-II has been overwhelming as compared to DSF-I in 2016. All onshore contract areas received bids while nine out of 10 offshore contract areas have received bids,” DGH said. “This bid round saw more than anticipated participation from new entrants from India and foreign countries like the US, UK, Australia, Singapore and the UAE,” DGH said.

Vedanta submitted the most bids – 21 in total – and is the sole bidder in one field. It was the biggest bidder in last year’s auction of major fields under the Open Acreage Licensing Policy (OALP), winning licences to 41 of the 55 blocks it bid for. With 15 bids, Arch Softwares came second in terms of bid volume, while state-run Oil and Natural Gas Corp. (ONGC) and Oil India Ltd (OIL) each bid for 10 fields, while Indian Oil bid for three.

A consortium of Shanti GD Ispat and Power, Bagadiya Brothers and Shanno Business India bid for 10 areas. Ganges Geo Resources also placed bids for 10 fields. Bids were received from Invenire Energy, Gem Petro and Oilmax Energy, Goodview Trading, HBA Offshore, Keerthi Industries, Dravida Petroleum DMCC and Nippon Power.

Foreign bidders included the UK’s Soco International, which has made its first foray into India with a single bid.

New Delhi introduced the DSF policy in 2016 under which small idle fields belonging to ONGC and OIL were returned to the state for public auction In DSF-I, a total of 134 bids were received for 34 of the 46 blocks on offer.

The “overwhelming” response to DSF-II has been due to upstream reforms, including a unified licence for the development of both conventional and unconventional hydrocarbons on a single block, the removal of a pre-qualification requirement that bidders must have prior technical experience, no upfront signature bonuses and full pricing and marketing freedom.

Edited by

Andrew Kemp


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