New Delhi: In a significant decision for the oil and gas sector, the Union Cabinet on Wednesday gave its approval for shifting to a revenue sharing model for the auction of 69 marginal fields of ONGC and Oil India. Petroleum and Natural Gas Minister Dharmendra Pradhan said that the move to a revenue sharing model is a paradigm shift from the prevailing profit sharing contract regime and could be implemented for future oil fields too. It will be applicable for all future hydrocarbon fields that will be auctioned.
“We are serious about maximum governance and minimum government. With the move to a revenue sharing model, Government interference will reduce,” said Pradhan.
Meanwhile, the Cabinet also approved auction of 69 marginal fields owned by national hydrocarbon exploration and production companies.These fields are partially explored and have 89 million tonne of oil and gas reserves. The fields will be auctioned and the winning bidder will be given a uniform licence to explore conventional and non-conventional sources of hydrocarbon which includes oil, gas, shale oil, shale gas and even coal bed methane if it is available.
Winners for these fields will be given a 20-year licence. Out of the 69 fields, 63 are of ONGC and 6 are of Oil India. Winners of onshore fields will have to start production in 3 years from the effective date of handover, shallow fields will have to start production in 4 years and deep water fields in 6 years.