Discovered Small Field Bid Round: 2016
July 14, 2016Houston
Ministry of Petroleum and Natural GasGovernment of India
Directorate General of Hydrocarbons
Interactive Session
DGH
Agenda
2
Exploration and Production Regime in India1
Model Revenue Sharing Contract4
Discovered Small Field Bid Round2
Bid Process5
Contract Areas on Offer3
Key Success Stories6
3
Exploration and Production Regime in India
1948
State Monopoly
Public Sector Upstream Oil Companies
Nomination Era Pre-NELP PSCsNELP/CBM PSCs Future
1991 1997
Beginning of de-regulation
28 producing fields and 28 exploratory blocks offered including private
players
Liberalization of E&P Sector (1997- 2009)
9 NELP and 4 CBM rounds.254 exploratory and 33 CBM blocks
through competitive bidding
2016
Further liberalization of the sector
Discovered small field bid round-2016 HELP - Hydrocarbon Exploration licensing
policy Open acreage licensing Revenue Sharing Model Pricing Guidelines for difficult gas fields
2015
Discovered Small Field
Policy
New Domestic Gas
Pricing Guidelines
20142009
4
Why DSF Bid Round?
Increasing focus on ‘Make in India’ in India given the high reliance on oil & gas imports1
Discovered fields with low risk profile - Can be quickly monetized2
World’s 3rd Largest energy consumer and growing rapidly – concerns around energy security
3
Emphasis on infusion of innovation and technology into Indian E&P sector4
Major policy reforms that makes the fields attractive for investments 6
Fields are spread over 1500 Sq. Km comprising 20% of the area under PSC regime5
5
Attractive Features of DSF Bid Round 2016
Low regulatory burden &
transparent bid process
Ease of entry & exit
Revenue sharing model
Single license forconventional & un-conventional
fields
No oil cessCustom 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
Key salient features of HELP Regime are extended to the Contract Areas offered under the Discovered Small Field Bid Round 2016
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Model Revenue Sharing Contract (1/2)
Free pricing & marketing freedom based on ‘Arms Length Principle’
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 due to denial of clearances by Government agencies
Work Programme
7
Model Revenue Sharing Contract (2/2)
Assistance to contractors in permits, approvals, work permits, licenses, leases, right of way, etc.
Government Assistance to Contractors
Government revenue (%) determined on a linear scale interpolated between LRP & HRP
Prices as per realized average daily revenue during each month Revenue = Amount accrued (produced & saved) – Taxes on
sale – Royalty
Revenue Share
Joint development of more than one contract areas operated by more than one companies
Mutual use or development of common infrastructure
Unit Development of Reservoir & Joint use of Common Infrastructure
8
Contract Areas on OfferContract Areas Offered
46 Contract
Areas
Initial in-place
volumes
Available Geo-
scientific data
Over 48 MMT Oil volumesOver 38 BCM Gas volumes
26 Onland18 Shallow water2 Deep water
2042 LKM 2D1336 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 – 13Reserves – 21.8 MmtoeArea – 119 SKM
Andhra Pradesh fields –15 (7 Offshore)Reserves – 4.4 MmtoeArea – 263 SKM
Tamil Nadu fields – 2Reserves – 0.4 MmtoeArea – 20 SKM
Rajasthan fields – 2Reserves – 0.1 MmtoeArea – 24 SKM
Mumbai fields – 27(all offshore)
Reserves – 55 MmtoeArea – 1001 SKM
Gujarat fields – 7 (2 offshore)Reserves – 4.1 MmtoeArea – 109 SKM
Madhya Pradesh – 1Reserves – 0.5 MmtoeArea – 15 SKM
67 fields offered under 46
contract areas
Bid Process and Important Dates
9
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, operationalized from 6th June, 2016
Houston opening todayCalgary and London
subsequently
Bid start date 15th July, 2016
Bid opening 31st October, 2016
Award Within 2 months
All about DSF Bid Round 2016
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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
Facilitation Cell:0120-2472015; 7042693218
http://mstcecommerce.com/eprochome/dsfbidding/index.jsphttp://www.indiadsf.com/
Data Access
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Physical data room booking: The Bookings tab on the www.indiadsf.comwebsite allows users to create new booking for the data room
Purchase of Information dockets: Field information dockets can be purchased from the MSTC ebidding portal (https://www.mstcecommerce.com/)
Purchase of Data package: Data package for various fields can be purchased from the DGH office in Noida. (Please write to [email protected])
http://www.indiadsf.com/https://www.mstcecommerce.com/mailto:[email protected]
Bid Qualifying Criteria
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1Payment of Tender Fees on or before bid closing date, by way ofpurchase of requisite Information docket (USD 1000 for 26 onlandcontract areas and USD 1000 for 20 offshore contract areas)
2 Bidder must be a company individually or in association with othercompanies, through an incorporated or unincorporated venture
3 Net worth of the bidding company’s should be equal to or more than itsParticipating Interest value of the Biddable Work Program commitment
4 Annual Report including audited annual accounts certified bycompany’s statutory auditor(s)
Bid qualified for evaluation
Bid Parameters
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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
1.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
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Key Success Stories
11Other Success Stories - Panna-Mukta | Mid & South Tapti | Kharsang | Dholka
• At the time of taking over the field, the Expected ultimaterecoverable reserves were 101 mmbl
• JV consisted of Cairn, Ravva Oil (Singapore), ONGC, Videocon• Already recovered cumulatively 277 mmbl of oil and additional
11 BCM of gas & still producing - Highest recovery factor in thecountry
• 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
• At the time of taking over the field, Oil & Gas In-place reserve(OGIP) about 1.6 BCF
• JV consisted of Niko Resources and GSPC• 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
Hazira - One of the major gas producers in Gujarat
Summarizing things that you would want to know about DSF
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Data Availability & Accessibility+ All exploration data related
to the contract areas are available in data centers
Physical data centers available at Noida (India), Houston, Calgary and London
Existing & Nearby Infrastructure+ Existing facilities in
contracted area would be handed over to license holders - No cost/ payment to be made by the contractor to NOCs
Contractors would have access to the facilities available in nearby areas operated by ONGC/ OIL at cost
Summarizing things that you would want to know about DSF
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Fiscal Regime+ No mandatory exploration Separate license would not be required by successful bidder for
unconventional resources viz. Natural Gas Hydrates, Shale, etc. No cost approval required from government Revenue post payment of royalty to be shared with government based on
the % share quoted by the contractor on a linear sliding scale basis Producers can sell the oil & gas freely subject to adoption of ‘Arms
length principle’ for sale & price discovery No mandatory JV with Indian companies or NOCs required No carried Interest by NOCs – 100% FDI allowed
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Thank you
Directorate General of Hydrocarbons(Under Ministry of Petroleum & Natural Gas)Phone: 0120-2472000, Fax: 0120-2472049Email: [email protected]: www.dghindia.gov.in
DGH India @DGHIndia DGH India
Slide Number 1AgendaSlide Number 3Why DSF Bid Round?Attractive Features of DSF Bid Round 2016 Slide Number 6Slide Number 7Slide Number 8Bid Process and Important DatesAll about DSF Bid Round 2016Data AccessBid Qualifying CriteriaBid ParametersKey Success StoriesSummarizing things that you would want to know about DSFSummarizing things that you would want to know about DSFSlide Number 17