Page 103 - DGH_Annual_Report

New Investment Opportunities in E&P Sector 103

14, 2015. DSF Policy falls under the broader
framework of the Hydrocarbon Exploration and
Licensing Policy (HELP).

DSF Policy introduced a transparent, investor-
friendly, and globally benchmarked mechanism
to offer discovered but unmonetized oil and gas
fields to domestic and international players with
the primary objective to monetize these already
discovered hydrocarbon fields by offering them
under a more investor-friendly, low-risk, and
transparent policy framework and reduce the
import dependency.
The DSF Policy represents a significant step
in India's energy strategy, aiming to leverage
its domestic hydrocarbon resources more
effectively, reduce import dependency,
promote small and Private Operators, and foster
investment and technology transfer in the
energy sector. The DSF Bid Round-I, launched
on May 25, 2016, marked the onset of a new era
in the country's oil and gas sector.

Following the successful implementation of
DSF Bid Round-I, the Cabinet Committee on
Economic Affairs (CCEA) in its meeting dated
February 7, 2018, approved extension of this
Policy to include un-monetized discoveries/
small fields from Production Sharing Contract
(PSC) regime along with un-monetized
discoveries of Nomination regime. Government
also decided to extend the DSF Policy for future
bidding rounds. For this purpose, a committee
comprising of Additional Secretary / Additional
Secretary & Financial Advisor (MoPNG), Joint
Secretary (Exploration, MoPNG) and Director
General of Hydrocarbons will identify Fields /
Discoveries to be put on offer in consultation
with CMD (ONGC) and CMD (OIL) for future Moderate Royalty Rates: The policy set
bidding round. The DSF Policy extension was moderate royalty rates, which are fees paid
notified vide Notification No. O-31018/149/2016- to the government for the right to extract
ONG-III dated April 5, 2018. hydrocarbons. This balanced approach
helps to attract investors while ensuring
6.3 Salient Fiscal and Policy Features of government revenue.
DSF Policy
Exemption from Custom Duty: Operators
100% participation allowed from Foreign are granted custom duty exemptions
Companies/JV: The DSF policy permits on imported equipment and materials,
full ownership and participation by foreign significantly reducing capital costs during
entities and joint ventures, encouraging exploration and development.
global investment and expertise in India’s
E&P sector. No Upfront Signature Bonus: Unlike traditional
bidding processes, these contracts do not
No Oil Cess: Crude oil produced under DSF require an upfront signature bonus, reducing
contracts is exempt from oil cess, reducing the financial burden on operators during the
the overall fiscal burden on contractors and initial stages of exploration and production.
enhancing project viability.