New Delhi, April 14: The government plans to auction 69 small and marginal fields surrendered by ONGC and Oil India.

Officials expect smaller firms to bid for the fields as they can develop them at a much faster and economic rate.

The oil ministry has floated a note for the Cabinet Committee on Economic Affairs (CCEA) to auction the fields.

The fields will be bid out on the basis of revenue share (share of oil and gas a bidder offers to the government upfront) and their work programme.

Companies offering maximum revenue to the government and committing themselves to do more work will win a field, sources said.

The weightage for revenue share will be 80 per cent, while 20 per cent will be for a work programme that may include the drilling of exploratory and development wells and seismic studies.

Revenue-sharing is a shift from the much-criticised production sharing contract regime.

Production-sharing allowed firms to recover all their cost before sharing profits with the government, a regime which was criticised by the Comptroller and Auditor General as one that provides incentive to operators to keep raising costs so as to postpone paying the government its share.

The marginal fields were given to ONGC before the licensing rounds on a nomination basis.

ONGC holds about 165 marginal fields (79 offshore and 86 onshore). Of this, 63 are being surrendered for auction. OIL is offering six fields.

Of the 165 fields with total ultimate reserves of 340 million tonnes, operations are going on in 139 and work is yet to start on 26.