Pertinently, neither OIL nor ONGC nor any other public sector company is barred from bidding for these marginal fields.
8In that sense, the marginal fields that are owned by these companies may go back again to them if they decide to bid aggressively for them.
8No one knows these fields better than the companies themselves.
8Therefore, the companies would know which fields to bid for and which not to.
8There is an argument that the public sector do did not work on these fields because the price was not remunerative. That is clearly not the case for crude fields but a case could be made out for gas fields, wherein the price elicited was not the market price.
8Now that the price has been freed, it is likely that the NOCs would like to bid aggresively for these fields now.
8The point however to note is that freeing the price of gas does not necessarily mean that the gas can fetch a high price. The ceiling will be definitely be the landed price of spot gas in the market.
8Additionally, these fields, being isolated, will face an evacuation problem.
8There are a few limitation that are going to hamstring some companies from bidding very aggressively. For one, the revenue share has to be ascertained beforehand, and that is difficult without actually doing real E&P work on the field. Based on available data handed over from a databank, it may not be possible for a bidder to figure out what the optimal government take should be.
8Revenue limitation on account of low crude and gas prices will mean there will be a reasonable amount of risk still involved in these fields.
For more details visit indianpetroplus.com
8In that sense, the marginal fields that are owned by these companies may go back again to them if they decide to bid aggressively for them.
8No one knows these fields better than the companies themselves.
8Therefore, the companies would know which fields to bid for and which not to.
8There is an argument that the public sector do did not work on these fields because the price was not remunerative. That is clearly not the case for crude fields but a case could be made out for gas fields, wherein the price elicited was not the market price.
8Now that the price has been freed, it is likely that the NOCs would like to bid aggresively for these fields now.
8The point however to note is that freeing the price of gas does not necessarily mean that the gas can fetch a high price. The ceiling will be definitely be the landed price of spot gas in the market.
8Additionally, these fields, being isolated, will face an evacuation problem.
8There are a few limitation that are going to hamstring some companies from bidding very aggressively. For one, the revenue share has to be ascertained beforehand, and that is difficult without actually doing real E&P work on the field. Based on available data handed over from a databank, it may not be possible for a bidder to figure out what the optimal government take should be.
8Revenue limitation on account of low crude and gas prices will mean there will be a reasonable amount of risk still involved in these fields.
For more details visit indianpetroplus.com
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