New Delhi: Federation of Indian Chambers of Commerce and Industry (FICCI) on Thursday welcomed the government's decision to auction 69 small and marginal oil and gas fields to private firms, saying it will incentivise domestic exploration and production (E&P) and is crucial to develop reserves that have not been monetised for many years.
The approval shows "a growing thrust" by the government to incentivise E&P in domestic oil and gas basins and reduce import dependence by 10 per cent by 2022, the industry body stated.
"An integrated marginal field policy under the revenue-sharing regime, along with uniform licensing for all hydrocarbons, would be pivotal to develop reserves which have not been monetised for many years due to their isolated locations, small size, high development costs and technological constraints," R S Sharma, Chair, FICCI Hydrocarbon Committee, said.
FICCI for long has been arguing in favour of building opportunities that would kick-start the sector and revive investor sentiment in the indigenous oil & gas basins.
It said competitive bidding mechanism would encourage private players to mull newer strategies to have a strong foothold in the area dominated by PSUs.
Sharma also said before the launch of competitive bidding, the industry looks forward to consultative meetings with the Ministry of Petroleum and Natural gas on the terms and incentives to explore these fields.
The government will auction 69 small and marginal oil and gas fields taken from state-run ONGC and Oil India on a new revenue sharing model, offering operators full marketing and pricing freedom.
The decision was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, on Wednesday.
The fields hold 89 million tonnes of oil and gas resources worth Rs 70,000 crore at current prices. The 69 fields will be clubbed into clusters and offered for bidding within 3 months, Oil Minister Dharmendra Pradhan had said.
