India’s state-controlled Oil & Natural Gas Corporation (ONGC) has launched the bid process to find partners that can enhance production from 43 marginal oil and gas fields.

The company said on Thursday that it has issued a Notice Inviting Offer (NIO) seeking partners to boost production from its marginal nomination fields in line with its goal of maximising recovery from its producing fields.

ONGC said 11 onshore contract areas comprising 43 oil and gas fields with total in-place volumes of about 1.1 billion barrels of oil equivalent have been offered to interested companies through an International Competitive Bidding (ICB) process.

“These contract areas are spread across the states of Gujarat, Assam, Tamil Nadu and Andhra Pradesh,” said ONGC.

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The blocks were historically awarded to ONGC on a nomination basis but several of the assets could not be developed to their full potential due to unfavourable government policies, industry experts said.

Sweetened terms

However, ONGC is said to have further sweetened terms for the latest offer, which is aimed at attracting private-sector investors.

The government is hoping private-sector players can aggressively ramp up production from the marginal fields by using new technology and adding capital.

Companies can bid either alone or in a consortium with others, and for one or multiple contract areas.

The bids would be evaluated by ONGC “on the basis of revenue sharing from the incremental production".

Formal bids are likely to be invited by the end of the year and a pre-bid conference will be held in October, Upstream understands.

As a part of the latest offer, companies will have “complete marketing and pricing freedom to sell hydrocarbons on an arm’s length basis through competitive bidding", ONGC said.

A contract period of 15 years is on offer with an option to extend by an additional five years.

A lower royalty rate and permission to continuously explore all kinds of hydrocarbons during the entire contract period is intended to attract investors.

Marginal field awards

ONGC last year awarded 49 marginal producing oil and gas fields to seven players.

Seven successful bidders were awarded contracts “in 13 contract areas comprising of 49 marginal oil and gas fields", the company added.

A dozen companies were understood to have tabled 28 bids to ONGC last year for these assets.

Previous bidders have included domestic players Duganta Oil & Gas, Orissa Stevedores, Priserve Infrastructure and Udayan Oil Solutions.

However, it could not be confirmed by Upstream whether these players were awarded acreage from last year's round.

ONGC in 2019 claimed the tender process had called for “interested companies to participate in an international competitive bidding process... for 17 onshore contract areas comprising of 64 oil and gas producing fields”.

The fields offered by ONGC in the previous marginal field auction were estimated to have in-place resources of about 2.19 billion boe, Upstream understands.