Page 5 - AsianOil Week 25 2021

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and pricing freedom and lower taxes, in the DSF upstream assets, however, with the Assam gov-
model. ernment campaigning for a reshuffling of assets
While the winners of the first DSF had between ONGC and OIL.
been expected to begin production from their
fields sometime in 2019 or 2020, the country’s What next
lockdown last year owing to the coronavirus Assam Chief Minister Himanta Biswa Sarma
(COVID-19) pandemic derailed upstream oper- has called on the central government to transfer
ations. However, some of those blocks awarded ONGC’s fields in the country’s north-east to OIL.
in the first auction are starting to come online. Sarma wrote in a letter to Prime Minister
Narendra Modi earlier this month that bring-
New supplies ing all of the north-east’s exploration assets
Kolkata-based Nippon Power’s 2.35-square km under the control of a single operator would
Kamboi block in Gujarat State, which was pre- help streamline operations. He added that
viously owned by ONGC, produced around because of OIL’s roots in Assam, coupled with
75 barrels of oil in the week to June 19, local its focus on upstream operations in the north-
daily the Business Standard reported. State-run east, this meant the company was uniquely
refiner Indian Oil Corp. (IOC) is set to buy Kam- positioned to take over as the region’s sole state
boi’s first consignment of crude. operator.
“From our Kamboi block, the [central gov- “With the emphasis of the government of
ernment] will get a revenue share of 40%, and India on intensive exploration and development
the Gujarat government will get 12.5% royalty. of Indian sedimentary basins, a single major
The rest will be the share of the operator,” Nippon operator can carry out exploration and produc-
Power founder and managing director Prakash tion operations in a seamlessly integrated man-
Saraogi told the daily. DSF round winners are ner with proper deployment of resources,” The
picked based on the amount of revenue they Times of India quoted Sarma’s letter as saying.
offer to share with the government. The official added that OIL, which “under-
South Asia Consultancy, meanwhile, is stands the nuances of the region”, was well
hoping to secure permission from the Gujarat placed to lift regional production from 4.15mn
government to begin producing oil from the tonnes in 2019-2020 to around 6mn tonnes by
9.88-square km South Patan block within the 2024-2025.
next few weeks. Whether Modi’s administration will be open
“We are awaiting consent from the state to such a move remains to be seen. However,
authority/state pollution control board to begin given the central government’s dissatisfaction
production. Hopefully, we can see the first oil with both ONGC and OIL, it seems hard to
within the next month,” company director imagine Assam’s request will be particularly
Dharam Singh Rajput told Business Stand- attractive.
ard. He expects initial production to hit 300- New Delhi wants to encourage both private
500 bpd from existing wells and has said the and foreign investment in its smaller fields,
block’s resources are worth more than IDR81bn which it hopes will eventually lead to greater
($1.09bn) when international oil prices are exploration of the country’s untapped basins
around $70 per barrel. and result in major new discoveries that will
It is not just the central government that is help to reduce the nation’s reliance on oil and gas
looking at redistributing the state-run oil majors’ imports.™

Week 25 24•June•2021 www. NEWSBASE .com P5