There is no book value for fields on offer: Atanu Chakraborty
INTERVIEW WITH DIRECTOR GENERAL HYDROCARBONS
For Atanu Chakraborty, Director General hydrocarbons, the foremost task at hand is to ensure a successful auction of the small oil and gas fields that the government has initiated. In an interview the top man at India’s upstream regulator says there is no book value attached to the fields on offer. Edited excerpts:
WITH CRUDE OIL PRICE STILL LOW, DO YOU EXPECT ENOUGH INDUSTRY RESPONSE FOR THE BLOCKS ON OFFER?
Investments into exploration and production projects are long- term decisions and are not based on short- term price outlook. Crude oil prices have been volatile over the past few years. However, it is important to note that the cost of development has also followed the trajectory of oil prices and are currently quite competitive. As the fields on offer are already discovered, the risk and cost profile is expected to be low. All of these factors would improve the commercial viability of the project.
HOW COOPERATIVE ARE THE STATES, ESPECIALLY ASSAM, WHERE THERE HAS BEEN LOCAL OPPOSITION TO THE AUCTION?
The government of Assam has repeatedly assured us that they would provide complete support to the bidders of the Discovered Small Field Bid Round. Besides, if offered fields are put on production, the state government would get a steady flow of revenue through the revenue sharing model. It will also create employment opportunities in the state. BY WHEN ARE THE BLOCKS LIKELY TO BE AWARDED? The bidding started from July 15, 2016, and the last date of bid submission is October 31, 2016. Blocks are likely to be awarded within two to three months of bid closing.
WHAT WILL BE THE MECHANISM FOR REIMBURSING THE INVESTMENT ALREADY MADE BY ONGC AND OIL IN THESE BLOCKS?
The book value of the investment made by state- owned oil companies in these blocks is nil, as informed by both ONGC and Oil India.