There is no book value for fields on of­fer: Atanu Chakraborty

IN­TER­VIEW WITH DI­REC­TOR GEN­ERAL HY­DRO­CAR­BONS

Resource Digest - - CONTENT -

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.

ATANU CHAKRABORTY

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