Greater Noida (UP) : The government plans to auction 69 small and marginal oil and gas fields to private firms on a new revenue sharing model, Oil Minister Dharmendra Pradhan said on the sidelines of Geo India 2015 conference.
As many as 63 discovered oil and gas are being surrendered by state-owned Oil and Natural Gas Corp (ONGC) as they were found to be uneconomic for a large firm with huge overheads to develop or bring to production. Smaller firms with a fraction of operating cost can develop them at much faster and economic rate. Oil India Ltd (OIL) has surrendered 6 marginal fields.
Under the revenue sharing model, bidders will have to upfront state how much oil and gas they will share with the government. The firm offering maximum win the right to explore and produce from the field.
This is a shift from the much-criticised Production Sharing Contract (PSC) regime where blocks were allocated to firms that bid highest amount of work in the area.
It allowed the firms to recover all their cost before sharing profits with the government, a regime which was criticised by CAG as one that provides incentive to operators to keep raising cost so as to postpone government share.
“We are working on fast track for the auction of marginal fields,” Pradhan said adding the round is likely in next few months. Pradhan said the policy regime for the 10th exploration licensing round is under discussion.
[alert type=”e.g. warning, danger, success, info” title=””]
Vedanta Explores Merging Cairn, Hind Zinc
Jaipur : Mining baron Anil Agarwal is mulling merging cash-cows Cairn India and Hindustan Zinc into his flagship Vedanta Group firm to create a global natural resources giant to rival Rio Tinto or BHP Billiton.
In an interview to PTI, Agarwal, the ebullient former scrap-metal dealer who became one of India’s most prominent self-made industrialists, said consultants have been appointed to explore if it would make sense to merge the two firms into Sesa Sterlite. The consultant will look at if it made sense to “keep oil and gas and energy companies separate or merge Hindustan Zinc, merge Cairn, so that we can have a company like BHP. That can be one model. It all depends on shareholders. How value can be created, how smooth. We are open for merger if the recommendation comes,” he said.
Sesa Sterlite, India’s biggest zinc and aluminium maker, is laden with debt, Rs 29,769 crore as on March 31, 2014 while Cairn and Hindustan Zinc (HZL) are its cash generating unit. Sesa holds controlling stake in both the firms. Cairn and HZL account for about 80% of Sesa’s pre-tax earnings.
[/alert]
Namita Tewari
