New Delhi: India plans to auction 60 discovered small fields of state-owned firms ONGC and Oil India next month under simpler contractual terms along with offering pricing and marketing freedoms.

The fields have over 195 million tonnes of hydrocarbon reserves. The 60 discovered fields have been clubbed into 26 contract areas - 15 onland and 11 shallow offshore.

Officials in the directorate general of hydrocarbons, the upstream regulator, said the auction would begin on August 9 and is expected to generate interest from exploration firms as crude prices have been going up.

Of the 60 fields, 22 belong to ONGC, five to Oil India and 12 are relinquished under the New Exploration and Licensing Policy (Nelp). In addition, 21 fields are the ones that did not receive any investor interest in the first round of auction of discovered small fields.

The auction will be done on a new revenue sharing model where bidders will be asked to quote the revenue they will share with the government at the low- and high-end of the price and production bands.

The Discovered Small Field (DSF)-II features includes the new revenue-sharing regime, which will replace the controversial production sharing contract (PSC) model where oil and gas blocks are awarded to firms which will show that they will do maximum work on a block.

The PSC regime allowed all their investments to be recovered from the sale of oil and gas before the profits are shared with the government. This model was criticised by the CAG which said it encouraged companies to keep raising the cost to postpone the higher share of profits to the government.

Also, a single licence for the exploration and exploitation of conventional and non-conventional hydrocarbons will be issued and operators will have the freedom to sell oil and gas at arms length and there would be no cess on crude oil.

Officials said to encourage new players to enter the sector, the DSF does not stipulate prior technical experience as pre-qualification criterion. Also, there is no payment of upfront signature bonus and royalty rates have been cut.

In the first round of bids for discovered small fields, 46 contract areas consisting 67 fields were put on offer. Of these, 34 received 134 bids, while 12 did not receive a single bid.

During the economic life of these blocks, the government is expected to get a gross revenue of about Rs 46,400 crore, of which the royalty collection is likely to be Rs 5,000 crore and a revenue share of Rs 9,300 crore, the director general of hydrocarbon had said.

As much as 15,000 barrels per day of cumulative peak oil production and 2 million standard cubic metres per day of cumulative peak gas production is expected from the small fields given out in the first round.

India imports 80 per cent of its oil needs. The auction is part of an effort to raise the domestic output which is one of the key to achieving Prime Minister Narendra Modi's target of cutting oil imports by 10 per cent by 2022.

The country's oil and gas demand is expected to rise nearly thrice from 229 million tonnes currently to 607 million tonnes in 2040.