India's Hydrocarbon Outlook Report - 2023-2024

India’s Hydrocarbon Outlook 2024 144 A Report on Exploration & Production Activities discoveries of Nomination regime. Government also decided to extend the DSF Policy for future bidding rounds. The DSF Policy extension was notified vide Notification No. O-31018/149/2016ONG-III dated 5th April 2018. Salient Fiscal and Policy features of DSF Policy The DSF Policy of 2015 introduced several important features to incentivize investment and exploration in India’s hydrocarbon sector: • No Oil Cess The policy exempted crude oil production from the payment of oil cess, which reduces the financial burden on producers and encourages investment in exploration and production activities. • Moderate Royalty Rates The policy set moderate royalty rates, which are fees paid to the government for the right to extract hydrocarbons. This balanced approach helps to attract investors while ensuring government revenue. • Exemption from Custom Duty Companies operating under the DSF Policy enjoy exemptions from custom duties, making it more cost-effective to import equipment and technology required for exploration and production. • No Upfront Signature Bonus Unlike traditional bidding processes, the DSF Policy does not require an upfront signature bonus, reducing the financial burden on operators during the initial stages of exploration and production. • Pricing and Marketing Freedom Operators are granted pricing and marketing freedom for oil and gas, allowing them to determine the pricing of their products and explore various marketing strategies. • No Carried Interest by NOCs The policy does not require National Oil Companies (NOCs) to hold a carried interest in the projects, providing more autonomy to contractors. • Single PML License The DSF Policy offers a single Petroleum Mining Lease (PML) license that covers both conventional and non-conventional hydrocarbons. This simplifies administrative processes for operators. • Flexibility in Exploration Activities During the contract period, there are no restrictions on exploration activities, allowing operators to adapt their strategies based on evolving conditions and information. • Experience No technical experience required, up to 100%participation by foreign companies are also allowed. The DSF Policy has been implemented through International Competitive Bidding (ICB) processes, enabling Indian and foreign investors and companies to participate in the development of un-monetized discovered hydrocarbon resources. This has led to the entry of about 29 new players in the Indian Exploration and Production (E&P) sector. Bid Rounds under the DSF Policy, within RSC Framework As of now, three (3) DSF bidding rounds have been conducted, offering a total of 103 Contract Areas encompassing 201 discoveries across 10 sedimentary basins (7 Category-I and 3 Category-II basins) covering approximately 17,593 square kilometres of area. Out of these, 85 Contract Areas have been awarded to about 35 Indian and foreign companies, covering approximately 16,508 square kilometres of area. These awarded Contract Areas encompass 175 discoveries with the estimated potential Inplace reserves are about 464 Million Metric Tonnes of oil equivalent (MMtoe), contributing significantly to India’s hydrocarbon resource development. The DSF Policy has thus played a crucial role in attracting investment and enhancing domestic hydrocarbon production. Salient details of different DSF Bid rounds are as under:

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