India's Hydrocarbon Outlook – 2022-2023

145 DGH: 3 DECADES OF UNLOCKING INDIA'S HYDROCARBON POTENTIAL iii. Discovered Small Field Bid Round-III (2022) In light of the success of the previous DSF Bid Round-I (2016) & DSF Bid Round-II (2018), coupled with numerous unexplored discoveries, the DSF-III bid round was initiated on June 10, 2021. This round offers an impressive 32 Contract Areas, covering 75 discoveries, spanning more than 13,000 sq. km of acreage. The prognosticated resource base of this round is estimated at 232 MMTOE (O+OEG). Feature Previous Provision Revised Provision Biddable Parameter Weightage: Biddable Work Program: 20% Govt. Revenue Share : 80% No HRP Ceiling Weightage: Biddable Work Program: 50% Govt. Revenue Share : 50% HRP Upper Ceiling : 50% Early Production No Incentive Incentivizing early commercial production during development period (Oil: Min of 5 US$/bbl or Quoted LRP) (Gas: Min of 0.2 US$/MMBtu or Quoted LRP) Liquidated Damage (LD) High LD in case of failing to meet Minimum Work Programme 75% reduction in LD amount Exit Option No Provision Option to exit without LD Payment in case of delay in statutory clearances beyond 2 years DSF Policy liberalised to attract Investors: Key Revisions Key highlights of DSF Bid Round-III are as follows: Enhanced Investor Confidence and Increased Participation : The DSF-III bid round saw a remarkable turnout of 107 bids for 32 Contract Areas, with the participation of 27 companies, of which 23 were private players. This increased participation has enhanced investor confidence in the sector. New Entrants : Five new entrants, including two foreign companies, have entered the Indian E&P sector through this bidding round, demonstrating a growing international interest in the Indian hydrocarbon industry. Hydrocarbon Potential : The early monetization of the 232 MMTOE hydrocarbon resource offered through this bid round is projected to contribute approximately 2 MMT & 8 BCM of oil and gas annually to domestic production in the next 3 to 5 years. Move Towards Blue Economy : A noteworthy aspect of this bid round is that approximately 90% of the hydrocarbon resources offered are in the Indian offshore region, signaling a move towards a blue economy. Attractive Terms : The terms offered in this bid round are particularly appealing, with the issuance of a PML letter alongside the contract signing and incentivization for early monetization, further encouraging investment in the sector.