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The Union Cabinet chaired by Prime Minister Mr Narendra Modi has given its approval to the Marginal Fields Policy for development of hydrocarbon discoveries made by national oil companies. India will auction 69 small and marginal oil and gas fields surrendered by state explorers like ONGC and Oil India. These discoveries could not be monetized for many years due to several reasons such as isolated locations, small size of reserves, high development costs, technological constraints, fiscal regime. At the same time India is the world’s fourth highest oil consumer and we need to augment local production, as mentioned earlier. We expect bidding to start within the next 3 months for such fields. They have reserves of about 89 million tonnes. Exploration companies will be able to submit bids for exploiting these oil fields. These oil fields were not developed earlier as they were considered marginal fields, and hence received low priority. With appropriate changes in policy, it is expected that these fields can be brought into production. In keeping with the principle of Minimum Government Maximum Governance, significant changes have been made in the design of the proposed contracts. With private and foreign participation in this sector, output from these fields can be to the tune of USD 10.5 billion (about Rs 70,000 crore).

Can you tell us more on the design of the proposed contracts?

The earlier contracts were based on the concept of profit sharing. Under the profit sharing methodology, it became necessary for the Government to scrutinize cost details of private participants and this led to many delays and disputes. Under the new regime, the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas and other items. The second change is that the licence granted to the successful bidder will cover all hydrocarbons found in the field. The new policy for these marginal fields also allows the successful bidder to sell at the prevailing market price of gas, rather than at administered prices. The decision is expected to stimulate investment, and ensure higher domestic oil and gas production.

You have initiated some serious measures, including surprise checks and terminations, to check the quality of petrol and diesel being supplied by retail outlets belonging to public sector oil marketing companies. Kindly elaborate…

I firmly believe that the customer should get what he is paying for without any compromise on quality, as well as quantity. I have asked all the concerned officers that people’s faith in the system must be ensured at all costs.