NEW DELHI: Companies operating small and medium-sized oil and gas fields will have to offer the government double their share of existing profits and divest assets for renewal of contracts of about 20 percent for a year, official sources said. Intervention.

Large fields, such as Cairn India’s Rajasthan block and Reliance Industries’ KG-D6 block, will have separate policies. The current policy arrangement includes 20 companies held by Cairn India, Reliance Industries, British Gas and Hadi Petroleum A number of contracts in the SME sector are expected to expire in the coming years. The government is implementing a contract extension policy rather than negotiating them separately.

“The reason for the high profit share is simple: in the last 200 years, contractors in the last To 25 A government source, requesting anonymity, said, “Any output beyond that is unexpected wealth, so the government should get it from this sector. It will bring the greatest benefit.” .

According to government sources, it has been suggested that the existing contractors should share half of the profits from small oil fields with the state and 60 percent of the profits from medium-sized fields with the state. According to the sources, the final decision on the matter will be taken by the Cabinet, which will soon consider extending the contracts of 28 operational blocks, whose mining leases are due to expire between two and seven years.

Panna’s existing contractors Muktaa, Amaguri, Kharsang, Cambay, Bandut, PY-1, Bakrol, Ravva and Dholka are famous oil and gas fields awaiting expansion.

According to sources, some of the prominent companies holding stake in the block include BG, RIL, Assam Company Ltd, Geo-Enpro, Jubilant Energy, Geopetrol, Oilex Ltd, GSPC, HOEC, Selan Exploration and Joshi Technology.

If any contractor does not accept the new terms, the fields will be allocated to state-owned ONGC or Indian Oil Corporation, sources said. Also, the contract will be renewed only if the contractor agrees to pay the existing royalty and withdraws from arbitration or legal disputes with the government. Extending the contract period to 10 years or the economic life of the field, whichever comes first, would be a good idea, sources said.

According to official projections, the field will have about 44 million tons of oil and oil-equivalent gas reserves when the contract expires. The oil ministry has suggested a uniform extension policy for blocks where contractors are asking for contract renewal.

Sources quoted earlier said, “The contract gives the government the right to renegotiate the terms before extension.” The government prefers to give a chance to the existing contractors as they are familiar with the field and understand the geological conditions.

“These areas require extra effort because they are small,” the source said, “and unless it is inevitable, re-tendering can be avoided.”

Contracts can only be extended with the approval of existing stakeholders or consortiums and applications can be made at least two years before the expiry of the contract instead of extension. Sources said there are five years to go before the expiry of the contract. Each application will be reviewed by the National Hydrocarbon Regulatory Authority (NHRA) and recommendations will be made within eight months of submission. The petroleum ministry is expected to act on the AG’s recommendations within four months.