Discovered Small Field Bid Round: 2016
June 6, 2016
Mumbai
Ministry of Petroleum and Natural Gas
Government of India
Directorate General of Hydrocarbons
Interactive Session
DGH
Agenda
2
Evolution of Upstream Sector in India 1
Bid Process 4
Contract Areas on Offer 2
Key Success Stories 5
Model Revenue Sharing Contract 3
3
Evolution of Upstream Sector in India
1948
State
Monopoly
Nomination Era Pre-NELP
PSCs NELP/CBM PSCs Future
1991 1997
Beginning of
de-regulation
Liberalization
of E&P Sector
2016
Further liberalization of the sector Discovered small field bid round-2016
Hydrocarbon Exploration Licensing
Policy (HELP) - Open acreage
licensing
Gas Pricing Guidelines for difficult
fields
2015
Discovered
Small Field
Policy
New Domestic
Gas Pricing
Guidelines
2014
Low regulatory burden
& transparent bid
process
Attractive Features of the DSF Bid Round 2016
Ease of entry & exit
Revenue sharing model
Single license for
conventional & un-
conventional fields
No oil cess and custom
duty exemption No prior technical
experience required
Pricing and marketing
freedom for Oil and Gas
Up to 100% FDI allowed
No carried interest by
NOCs
No upfront signature
Bonus
Provision for sharing of
common facilities
Continuous exploration
permitted during
contract period
4
Contract Areas on Offer
Contract Areas Offered
46 Contract
Areas
Initial in- place
volumes
Available Geo-
scientific data
Over 48 MMT Oil volumes
Over 38 BCM Gas volumes
26 Onland
18 Shallow water
2 Deep water
2042 LKM 2D
1336 SKM 3D
130 Wells
Adjoining Facilities of ONGC and OIL
Bidders can access well head equipment, surface and nearby facilities
on chargeable basis
For Further details, visit the website http://www.indiadsf.com
Assam fields – 13 Reserves – 21.8 Mmtoe Area – 119 SKM
Andhra Pradesh fields – 15 (7 Offshore) Reserves – 4.4 Mmtoe Area – 263 SKM
Tamil Nadu fields – 2 Reserves – 0.4 Mmtoe Area – 20 SKM
Rajasthan fields – 2 Reserves – 0.1 Mmtoe Area – 24 SKM
Mumbai fields – 27 (all offshore) Reserves – 55 Mmtoe Area – 1001 SKM
Gujarat fields – 7 (2 offshore) Reserves – 4.1 Mmtoe Area – 109 SKM
Madhya Pradesh – 1 Reserves – 0.5 Mmtoe Area – 15 SKM
67 fields offered under 46
contract areas
5
Model Revenue Sharing Contract (1/2)
Free pricing & marketing freedom of crude oil and natural gas in domestic market
Minimum price for calculation of revenue & royalty shall be the monthly average of Indian crude basket for crude oil and applicable domestic gas prices as per Govt. guidelines
Marketing & Pricing
Effective Date – later of contract signing date or date of issue / transfer of lease
Period of 20 years or economic life of the field, whichever is less
Contract Duration
Biddable work program – Number of development/ appraisal wells
Liquidated damages (LD) - US$ 1 Mn (On-land), US$ 3 Mn. (Shallow Water) & US$ 6 Mn. (Deepwater)
Proportionate reduction in work program in case of reduction in contract area due to denial of clearances by Government agencies
Work Programme
6
Model Revenue Sharing Contract (2/2)
Government will extend assistance to contractors subject to compliance to applicable laws & relevant procedures – permits, approvals, work permits, licenses, leases, right of way, etc.
Government Assistance to Contractors
Government revenue (%) to be determined on a linear scale interpolated between Lower Revenue Point (LRP) & Higher Revenue Point (HRP) for each month based on the realized average daily revenue during the month
Revenue = Amount accrued (produced & saved) – Taxes on sale – Royalty
Revenue Share
Contractors may undertake Joint development of more than one contract areas operated by more than one companies to maximize the recovery
Two contractors authorized for separate contract areas can mutually agree for use or development of common infrastructure
Unit Development of Reservoir & Joint use of Common Infrastructure
Bid Process and Important Dates
7
Bid Process
Bidders to bid*
online** at
designated portal
Hardcopy submission
of all supporting
documents to DGH
DGH to submit bid
evaluation reports to
the Government for
consideration
Ministry to accord
approval based on
ECS
recommendations
After due
approvals, RSC***
to be finalized
with awardees
*Any number of Contract Areas can be bid for
** Most of the documents will be uploaded online
*** Revenue Sharing Contract
Important Dates
Activity Date
Launch 25th May, 2016
Data Rooms
Noida from 6th June,
2016
Calgary, Houston and
London subsequently
Bid start date 15th July, 2016
Bid opening 31st October, 2016
Award Within 2 months
All about DSF Bid Round 2016
8
E-Bidding portal - http://mstcecommerce.com/eprochome/dsfbidding/index.jsp
• User-friendly interface for uploading bid documents with easy registration process
• Instruction to bidders on bid upload process, methodology of bid evaluation, etc.
• Secure gateway through Digital Signature Certificate
• Provision for online payment of Tender fees
Technical Information Portal - http://www.indiadsf.com/
• Ready reckoner on ‘how to access portal’
• Bidders can view (free of cost)
E&P data - Seismic 2D Lines, Field Boundaries, Geographical Locations, Well Information
Contract Areas related data – Field area, quantum of E&P data, reserve estimates etc.
Information guides on taxes, policies and contracts
• Physical data view room bookings, roadshow bookings, one-to-one meetings can be
scheduled
• News, updates and FAQs related to the DSF Bid Round 2016
Physical Data Centers • Physical data centers with interpretation facility set up at Noida
• Data centers to be set up at Calgary, Houston and London
• Bidders can access technical data of various contract areas on offer
• For first two days, free viewing of data and interpretation available
Bid Qualifying Criteria
9
1 Payment of Tender Fees on or before bid closing date
2 Bidder must be a company individually or in association with other companies, through an incorporated or incorporated venture
3 Net worth of the bidding company’s should be equal to or more than its Participating Interest value of the Biddable Work Program commitment
4 Annual Report including audited annual accounts certified by company’s statutory auditor(s)
Bid qualified for evaluation
Bid Parameters
10
80%
20%
1.Contractor to bid the Government Share of revenue (%) against
Lower Revenue Point (LRP) ≤ US$ 0.0100 million/day Higher Revenue Point (HRP) ≥ US$ 1.000 million/day
2.Bid yielding highest NPV will get 80 marks and rest bids would be scored on pro-rata basis
1. Bid proposing maximum number of appraisal / development wells would get 20 marks
2.Rest bids would be scored on pro-rata basis
Revenue Share
Biddable Work
Program
Weights
11
Key Success Stories
11
• At the time of taking over the field, the Expected ultimate recoverable reserves were 101 mmbl
• Already recovered cumulatively 277 mmbl of oil and additional 11 BCM of gas & still producing - Highest recovery factor in the country
• Total Investment – US$ 0.91 Billion
• Cumulative revenue - US$ 14.6 Billion
• Contractor share of profit – US$ 5.3 Billion
Ravva - One of the most successful discovery
Hazira - One of the major gas producers in Gujarat
• At the time of taking over the field, Oil & Gas In-place reserve (OGIP) about 1.6 BCF
• Already produced cumulatively 348 BCF of gas & still producing
• Total Investment – US$ 0.33 Billion
• Cumulative revenue - US$ 1.5 Billion
• Contractor share of profit – US$ 0.68 Billion
Other Success Stories - Panna-Mukta | Mid & South Tapti | Kharsang | Dholka
12
Thank you
Directorate General of Hydrocarbons
(Under Ministry of Petroleum & Natural Gas) Phone: 0120-2472000, Fax: 0120-2472049
Email: [email protected]
Website: www.dghindia.gov.in
DGH India @DGHIndia DGH India