Discovered Small Field Policy
Source : PIB
GS III : Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

Why in News ?

Discovered Small Field (DSF) bid round-III for international competitive bidding was launched by Minister of Petroleum & Natural Gas and Steel.

• The virtual event was attended by more than 450 participants including major E&P players, prospective new entrants and service providers.

Key Facts

• • To devise innovative ways for early resource monetisation, including expediting production timelines under DSF I & II.
  • The work on DSF should be done at exponential speed.
    • It should be on a mission mode to monetise our natural resources for greater public welfare.
  • Encouraged by the success of DSF bid rounds-I &II, the Government of India has extended the DSF Policy by launching DSF bid round-III. Previous two DSF rounds had a resounding success.
  • In DSF Round – I launched in 2016
    • 134 bids were submitted for 34 contract areas by 47 companies.
    • 30 Revenue Sharing Contracts were signed.
  • In DSF Round – II launched in 2018
    • 145 bids were submitted for 24 contract area.
    • 24 Revenue Sharing Contracts were signed.

What is Discovered Small Field (DSF)?

• • For the monetisation of unmentioned discoveries of National Oil Companies (NoCs) Government in September, 2015 approved 69 marginal fields/discoveries for offer under Discovered Small Fields Policy.
  • These Contract Areas are awarded under the new regime of Revenue Sharing Model.
  • Discovered Small Field (DSF) Policy Bid Round-I under the Discovered Small Field Policy was launched on 25th May 2016
    • It offering 67 discovered small fields/discoveries clubbed into 46 Contract Areas for international bidding.
  • Discovered Small Field (DSF) Policy Bid Round-II launched in 2018 Government approved the
    • 59 discovered small fields/unmonetized discoveries estimated to have 189.61 Million Metric Tonnes (MMT) Oil and Oil equivalent gas
  • DSF policy has multiple attractive features like
    • Revenue sharing contract model with low regulatory burden
    • No minimum biddable work programme
    • No prior technical qualification required
    • No upfront signature bonus
  • Features of Discovered Small Field Policy
    • Revenue Sharing contract :
      • A simple and easy to administer contractual model in line with Government’s effort to promote Ease of doing business.
      • Biddable Government share of revenue shall be payable only after onset of production.
    • FDI participation by foreign companies : Upto 100% and joint ventures.
    • Single licence for Conventional & Un-conventional hydrocarbon is allowed.
    • Crude Oil & Gas Pricing and Sale :
      • Freedom to sell crude oil exclusively in domestic market.
      • For Gas pricing, contractor will have freedom for pricing of gas produced.
    • Technical Knowledge : To incentivise new investors technical capability is not kept as a pre-qualification criteria.
    • Cess and Duty :
      • Customs duty exempted on import of goods and services for Petroleum operations.
      • No Oil Cess will be applicable on crude oil production

Discovered Small Field (DSF) bid round-III

• • Offering 32 Contract Areas which comprise of 75 discoveries.
  • These fields are spread over 9 sedimentary basins covering more than 13,000 square kilometers.
  • It having in place Hydrocarbon estimated to be around 230 MMT.
  • Geo-scientific data for fields on offer will be showcased through Data Room with interpretation facilities which would assist the potential bidder in making informed decision.

Hydrocarbon exploration and licensing policy

• • Hydrocarbon Exploration and Licensing Policy (HELP) was launched with the clear objective of boosting the production of oil & gas in the Indian sedimentary basin.
  • HELP promises simpler rules, tax breaks, marketing freedom, and is a part of government policy to double oil and gas output.
  • The government will send experts to verify the claims and grant licenses to the companies known as Open Acreage Licensing Policy (OALP).
  • The government has allowed 100% FDI in oil and gas sector to promote a healthy competition between public and private sector.

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