Indian state-owned upstream company Oil & Natural Gas Corp said Thursday it would bid for marginal oil fields that it had previously discovered, in the latest round of offerings.
A total of 67 discovered oil and gas fields will be put up for an auction that starts on July 15. Most of these fields were discovered by ONGC, but were surrendered to the government due to high development costs.
"Our team has started studying [the fields]. We are just refreshing our old workings, since we used to own most of them. With the new fiscal regime, some of [the fields] may fall within our bidding parameters," ONGC Chairman D.K. Sarraf said while releasing the company's annual results.
Oil minister Dharmendra Pradhan launched the auction on Wednesday, and investors can bid from July 15 until October 31 for these fields. Results of the auction will be out on November 16, and the fields would be awarded to successful bidders in January 2017.
This launch comes more than eight months after the Prime Minister Narendra Modi-led government abandoned a decades-old regime of awarding such blocks under production sharing contracts, switching instead to a revenue sharing model.
The discovered fields are said to hold proven reserves of up to 625 million barrels of oil equivalent. Awarding these fields would unlock around Rupees 700 billion ($10 billion) worth of oil and gas reserves.
Separately, Sarraf said the company would cut its capital expenditure by 17% year on year to around Rupees 300 billion in the financial year 2016-2017 (April-March), from Rupees 362 billion in the previous financial year.
"Our capital expenditure is not dependent on crude oil prices. However, when prices are low, the cost of services and equipment is also low. Therefore, even if the capital expenditure comes down, the actual physical work remains the same," Sarraf added.
ONGC reported a 12% year-on-year jump in net profit for the three months ended March 31, 2016, to Rupees 44 billion. It reported a revenue of Rupees 164 billion in the quarter, a 24% year-on-year fall, because of a sharp decline in oil prices.
For the full fiscal year ended March, the company's net profit fell 10% to Rupees 160 billion, while its annual revenue dropped 5% to Rupees 786 billion.
ONGC produced 26 million mt of crude oil in fiscal 2015-2016, the same as a year ago, and 22.5 billion cu m of gas, 4% lower year on year.
It made 17 hydrocarbon discoveries in fiscal 2015-2016 and completed eight projects at a cost of Rupees 284 billion over the same period.
In 2015-2016, its board approved seven new projects at an estimated cost of Rupees 479 billion for development in the coming years.
ONGC said it held a positive outlook for its crude oil and gas production as the execution of approved projects were on schedule.
"We expect that both oil and gas production will increase in the next year as many of the projects we had undertaken last year will be complete," said Sarraf.
