"We have identified 67 blocks for the tenth auction round, but a final number of blocks would depend on how many of them get defense, environment and other regulatory approvals," Director General of Hydrocarbons (DGH), Choubey told reporters on the sidelines of an industry meet organised by Cairn India.
The oil ministry has proposed a new fiscal regime for future oil and gas contracts and the next bidding round is expected to be launched after the cabinet committee on economic affairs approves it, he said.
ET wrote first on Friday that the government prepares draft of a "perfect" exploration regime that rules out any possibility of gold plating by contractors, gives them operational freedom, limits roles of bureaucrats in managing gas and oilfields, eliminates needs for CAG audits and allows companies to explore all kinds of oil and gas resources in a block.
Oil Minister Veerappa Moily said the government had learnt important lessons in last nine auction rounds of oil and gas blocks and this time it would invite bids with full preparation. "We are working on the next round. The tenth will be the perfect round," he had said.
"Right now, we have invited comments from the industry on the proposed policy," an oil ministry official said.
It is good that the minister wants to have a unified auction policy, which will give the winner rights to explore conventional oil and gas, shale gas, CBM, gas hydrates and any other forms of hydrocarbons in the block, industry executives said.
The proposal has concurred with CAG that the existing fiscal regime encouraged cost escalation and proposed to dispense with the controversial cost recovery regime, which allowed companies to first recover their expenditure in developing oil and gas fields before they shared the profit with the government, officials said.
In the proposed fiscal regime, the contractor in the block will share profit with the government as soon as production would start. The revenue share, which will be biddable, will be net of royalty. "Thus, a major impact of the proposed model would be to provide the contractor with the incentives for keeping costs down. Pegging the costs down will enhance the contractor's profitability of operating the project," the draft policy said.
The proposal has incentivised cost intensive shallow and deepwater offshore exploration through exemption from royalty. "As revenue sharing proposed here would be net of royalty, part of it can be captured in revenue share," the draft proposal said.
The proposal eliminates several litigious features that marred the old contracts and caused inordinate delays. The requirement of declaration of commerciality (DoC) and field development plan (FDP) is no longer mandatory; contractors can continue exploring during development and production of discoveries.
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