Discovered Small Field Bid Round: 2016

Transcription

1 Ministry of Petroleum and Natural Gas Government of India Interactive Session Discovered Small Field Bid Round: 2016 Directorate General of Hydrocarbons DGH July 14, 2016 Houston

2 Agenda 1 Exploration and Production Regime in India 2 Discovered Small Field Bid Round 3 Contract Areas on Offer 4 Model Revenue Sharing Contract 5 Bid Process 6 Key Success Stories 2

3 Exploration and Production Regime in India State Monopoly Public Sector Upstream Oil Companies Liberalization of E&P Sector ( ) 9 NELP and 4 CBM rounds. 254 exploratory and 33 CBM blocks through competitive bidding New Domestic Gas Pricing Guidelines Discovered Small Field Policy Beginning of de-regulation 28 producing fields and 28 exploratory blocks offered including private players 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 Nomination Era Pre-NELP PSCs NELP/CBM PSCs Future 3

4 Why DSF Bid Round? 1 Increasing focus on Make in India in India given the high reliance on oil & gas imports 2 Discovered fields with low risk profile - Can be quickly monetized 3 World s 3 rd Largest energy consumer and growing rapidly concerns around energy security 4 Emphasis on infusion of innovation and technology into Indian E&P sector 5 Fields are spread over 1500 Sq. Km comprising 20% of the area under PSC regime 6 Major policy reforms that makes the fields attractive for investments 4

5 Attractive Features of DSF Bid Round 2016 Key salient features of HELP Regime are extended to the Contract Areas offered under the Discovered Small Field Bid Round 2016 Low regulatory burden & transparent bid process No upfront signature Bonus Revenue sharing model Single license for conventional & un-conventional fields No carried interest by NOCs Pricing and marketing freedom for Oil and Gas No prior technical experience required No oil cess Custom duty exemption Ease of entry & exit Up to 100% FDI allowed Provision for sharing of common facilities Continuous exploration permitted during contract period 5

6 Model Revenue Sharing Contract (1/2) Marketing & Pricing Free pricing & marketing freedom based on Arms Length Principle Contract Duration 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 Work Programme 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 6

7 Model Revenue Sharing Contract (2/2) Government Assistance to Contractors Assistance to contractors in permits, approvals, work permits, licenses, leases, right of way, etc. Revenue Share 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 Unit Development of Reservoir & Joint use of Common Infrastructure Joint development of more than one contract areas operated by more than one companies Mutual use or development of common infrastructure 7

8 Contract Areas on Offer 46 Contract Areas 26 Onland 18 Shallow water 2 Deep water Contract Areas Offered Rajasthan fields 2 Reserves 0.1 Mmtoe Area 24 SKM Assam fields 13 Reserves 21.8 Mmtoe Area 119 SKM Initial inplace volumes Available Geoscientific data Over 48 MMT Oil volumes Over 38 BCM Gas volumes 2042 LKM 2D 1336 SKM 3D 130 Wells Gujarat fields 7 (2 offshore) Reserves 4.1 Mmtoe Area 109 SKM Mumbai fields 27 (all offshore) Reserves 55 Mmtoe Area 1001 SKM 67 fields offered under 46 contract areas Madhya Pradesh 1 Reserves 0.5 Mmtoe Area 15 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 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 8

9 Bid Process and Important Dates Bid Process Important Dates Bidders to bid* online** at designated portal Hardcopy submission of all supporting documents to DGH Activity Date Launch 25 th May, 2016 Ministry to accord approval based on ECS recommendations DGH to submit bid evaluation reports to the Government for consideration Data Rooms Noida, operationalized from 6 th June, 2016 Houston opening today Calgary and London subsequently After due approvals, RSC*** to be finalized with awardees Bid start date 15 th July, 2016 Bid opening 31 st October, 2016 *Any number of Contract Areas can be bid for ** Most of the documents will be uploaded online *** Revenue Sharing Contract Award Within 2 months 9

10 All about DSF Bid Round 2016 Technical Information Portal - 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 E-Bidding portal - 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 Facilitation Cell: ; facilitationdsf@dghindia.gov.in 10

11 Data Access Physical data room booking: The Bookings tab on the website 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 ( Purchase of Data package: Data package for various fields can be purchased from the DGH office in Noida. (Please write to 11

12 Bid Qualifying Criteria 1 Payment of Tender Fees on or before bid closing date, by way of purchase of requisite Information docket (USD 1000 for 26 onland contract areas and USD 1000 for 20 offshore contract areas) 2 Bidder must be a company individually or in association with other companies, through an incorporated or unincorporated 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 12

13 Bid Parameters Revenue Share 1.Contractor to bid the Government Share of revenue (%) against Lower Revenue Point (LRP) US$ million/day Higher Revenue Point (HRP) US$ million/day Weights 80% Biddable Work Program 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 20% 13 11

14 Key Success Stories Ravva - One of the most successful discovery At the time of taking over the field, the Expected ultimate recoverable 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 the country Total Investment US$ 0.91 Billion Cumulative revenue - US$ 14.6 Billion Contractor share of profit US$ 5.3 Billion 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 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 Other Success Stories - Panna-Mukta Mid & South Tapti Kharsang Dholka 11

15 Summarizing things that you would want to know about DSF + Data Availability & Accessibility + Existing & Nearby Infrastructure 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 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 11

16 Summarizing things that you would want to know about DSF + No mandatory exploration Fiscal Regime 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 11

17 Thank you Directorate General of Hydrocarbons (Under Ministry of Petroleum & Natural Gas) Phone: , Fax: Website: DGH DGH India 17