logo

ONGC mulling buying majority stake in GSPC’s KG gas block

Since the BJP-led government took power in the Centre, Gujarat State Petroleum Corp Ltd (GSPC) is seeking to sell a majority stake in its KG-OSN-2001/3 (Deendayal) block in Bay of Bengal to Oil and Natural Gas Corp (ONGC), sources said.

GSPC was to begin gas production from the block in 2013 but after sinking in $3.6 billion it was found that gas reserves are one-tenth of 20 trillion cubic feet claimed in 2005 and that too is technically difficult to produce.

In the process it has amassed Rs 19,576 crore of debt, on which interest cost was Rs 1,804.06 crore in 2014-15, according to the CAG. And against this its revenue was Rs 152.51 crore in 2014-15.
Sources said GSPC has been doing trial production of a very small volume of gas from August 4, 2014 and has not yet reached commercial production and in absence of revenue commensurate with the debt servicing obligations it risks becoming a defaulter.

To bail out of the situation, a few weeks back it offered to sell 50 per cent stake to ONGC, they said.
Money from ONGC can repay a part of the debt and the remaining would become a joint liability of the two firms.

Sources said GSPC also wants ONGC to use its under-sea infrastructure for a fee. ONGC has gas discoveries in a neighbouring block and GSPC wants gas from those to be routed through its Deendayal block infrastructure for onward transportation to the shore.

But the state-owned firm feels it was not technically feasible as its KG-D5 gas cannot be mixed with GSPC’s gas which has high levels of sulphur and carbon dioxide content.

Also it is high-pressure and high-temperature gas. Besides, the GSPC facilities on Deendayal field are about 60-km away from the Cluster-II gas fields in ONGC’s KG-DWN-98/2 block and pumping gas that far is not feasible. Sources said ONGC feels it is not cost effective to install compressors on the seabed to pump gas from its fields to GSPC facilities. GSPC’s field is one of the most difficult fields in the world as cost of extracting gas would be in the vicinity of $12 per million British thermal unit, double the rate provided by the government currently, they said. 

Bags top int’l award for Online Internal Communications
ONGC’s internal communications vertical has secured the top international award for Online Internal Communications from the prestigious Society for New Communications Research (SNCR), USA. The 2016 SNCR Excellence in New Communications Awards were publicly announced by the Society at an exclusive reception and awards ceremony at The Conference Board’s New York headquarters this week. ONGC secured the award under the category: Internal Social/ Online Internal Communications and Communities, Government Division. ONGC has implemented significant innovative and employee-engaging online internal communication features since 2015 and it now commands a rich, diverse and balanced portfolio of best-in-class intranet portal features – a pioneering initiative in the Indian public sector. The features were conceptualised and implemented by a small in-house team of ONGC. The detailed Case Study of ONGC Internal Communications was selected by an independent jury from among various case studies from around the world. 
PTI

PTI

Our contributor helps bringing the latest updates to you


Share it
Top