DSF: Discovered Small Fields

Suppose a farmer discovers a small pocket of oil while digging a well on his land, decades ago. It is too small to justify building a full refinery pipeline for, so he shrugs and moves on, and the oil sits there, discovered but never touched. Multiply that farmer by ONGC and Oil India, India's two oldest state exploration companies, and multiply the pocket of oil by hundreds of small and marginal fields discovered over seventy years of drilling. That is the exact problem DSF was built to solve.

For decades, ONGC and Oil India found oil and gas in places too small, too remote or too complicated to be worth developing on their own balance sheet. A large national oil company optimises for big fields. A small field with modest reserves often sat in a drawer, technically discovered, commercially ignored. In October 2015, the government carved these idle discoveries out and offered them to anyone willing to develop them, big or small, Indian or foreign, under a Revenue Sharing Contract similar in spirit to OALP.

The first DSF round in 2016 offered 67 discovered fields clubbed into 46 contract areas. Thirty contracts covering 43 fields were eventually awarded to 20 companies, with in place reserves estimated near 40 million tonnes of oil and 22 billion cubic metres of gas. Round II followed in 2018, offering 59 fields across 25 contract areas and drawing 145 bids from 40 companies, three of them public sector and eleven private, an early sign that mid sized Indian companies, not just the majors, were willing to bet on small fields. Round III in 2022 scaled up further, offering 75 discovered fields across 32 contract areas with a combined resource potential of around 230 million tonnes of oil equivalent.

A Special DSF Round in 2024 told a more sobering story. It drew 60 bids but only 2 blocks were actually awarded, a sign that the easiest, most attractive small fields had already been picked over in the first three rounds. DSF Round IV, launched in April 2025 alongside OALP Round IX, tried to refresh the pipeline with 55 fresh discoveries across 9 contract areas and estimated reserves of 258.59 million tonnes of oil equivalent.

Hindustan Oil Exploration Company is the poster child for what DSF was meant to achieve. Its B80 block, won in the very first round, saw its estimated reserves rise roughly tenfold after further appraisal, turning a modest bet into a meaningful production asset. That is the entire logic of DSF in one company. A field that a giant like ONGC would never prioritise can be a genuinely profitable core asset for a smaller, more focused operator.

Watch for DSF whenever a smaller listed exploration company, not just the ONGC or Oil India of the world, announces a new block win. It usually means they have picked up a field someone else already found and left on the shelf, and are now betting they can bring it into production faster and cheaper than the state ever could.